For independent retailers such as Thomas George, who owns the three E Street Denim stores in Illinois and Wisconsin, the deep discounting this holiday season by big retailers like Saks Fifth Avenue, Neiman Marcus, Bloomingdale’s and Macy’s has forced him to rethink his buying strategy for the new year.
“You would have to be a fool not to reexamine what you’re doing,” he said. “Everybody has the same merchandise. When one store cuts prices, they all have to. It’s making me look at every brand that I have, and I’m cutting back on the widely distributed brands that are being discounted extensively.”
In total, George is trimming the number of men’s and women’s denim brands he carries from about 80 last year to 45 for spring. He has reduced his buy for the widely available Seven For All Mankind and is eliminating Cheap Monday, David Kahn and Ditto, among many others. “It doesn’t mean they are bad brands,” he emphasized.
Like many companies in the current retail meltdown, the bigger premium denim brands have been giving back business in heavy markdown money, according to Earnest Sewn president Scott Morrison. “We are in a unique position in that we’re not a volume business, so we haven’t been part of that. Our presence isn’t big enough for retailers to look for us for that markdown money.”
Morrison also has heard from retail contacts that some of the bigger premium denim players have offered 20 percent discounts to their wholesale partners. “I have never heard of that happening before in my entire time in this business. It’s totally uncharacteristic and atypical,” he noted. “Retailers have asked us to match that, but we’re not doing it.”
What Earnest Sewn is doing for retail customers is swapping out product that isn’t working in specific locations, extending order delivery windows so retailers can buy closer to season and working with their factor to extend credit as generously as possible to troubled independent stores.
While the steep discounting at luxury retailers has raised eyebrows, it’s been necessary to move product and control inventory levels. “Everybody is talking about these huge sales, but what people have to understand is that these stores have huge pipelines of merchandise gushing in, and they can’t just turn it off,” explained Ari Hoffman, chief executive officer of Gant USA. “They have to move the product. For 2009, however, retailers are reducing the pipeline by not placing orders, canceling orders and shrinking orders. They can’t afford to have marginal or insignificant vendors. Unfortunately, I think it will be most difficult on new, up-and-coming designers. It’s the sad reality. The knee-jerk reaction is to focus on established brands.”
For Andrew Buckler, a young New York-based men’s wear designer, that has meant some lost or decreased orders. “People are reassessing their buys and are calling to reduce their orders,” he noted. “People are taking less risks with the experimental pieces, and are focusing on the core product — such as denim, our jersey T-shirts and tailored blazers and outerwear. But we figure that we are better off working with them now than to have them not pay us later.”
Alberta Ferretti's "Rainbow Week" sweaters are back. The designer closed her #MFW show with a few day-of-the-week sweaters, which first debuted on the catwalk last January as part of the pre-fall 2017 collection. #wwdfashion (📷: @delphineachard)