By  on April 29, 2008

Southeast designer retailers report spring business as flat with last year, and say it is being driven by affluent consumers less affected by economic factors. "It's now harder to sell a $198 sweater than a $1,100 jacket," said Cami Krablin, women's buyer at James Davis, a high-end Memphis specialty store.

With the weak dollar, soaring prices on European goods are forcing retailers to adjust buying strategies. In Miami, an influx of European tourists shopping for designer deals has helped mitigate the rising cost.

Tourists have always been 80 percent of the clientele at Oxygene, a designer store at the Bal Harbour Shops in Bal Harbour, Fla. But the mix has shifted from Latin Americans to Europeans, especially Russians, who now contribute half of sales. "This customer is label-driven, wants the latest thing, and can afford it," said Shayne Cohen, co-owner of Oxygene with husband Felix. "Selling a $20,000 dress is not uncommon."

Spring bestsellers are jeweled gowns by Galliano, London's Jenny Packham and Jasmine di Milo; Share Spirit's embroidered lace, and leather rock 'n' roll-inspired sportswear. European lines are 80 percent of the mix.

Roma Cohen, Felix Cohen's son, owns Alchemist, a South Beach, Fla., designer boutique, where European tourists are 90 percent of the clientele. He offers Jil Sander, Rick Owens and Hervé Léger, and will pick up Givenchy for fall. He carries U.S. lines, including Phillip Lim, for European bargain hunters. Hervé Léger's bandage dresses, from $700 to $2200, sold more than 150 units, and Rick Owens' chiffon pants, at $900, sold 20 this spring.

At Gus Meyer, a Birmingham, Ala.-based specialty store with a Nashville unit, designer business has been erratic, with sales off during spring break and tax deadline week, according to Janice Elliott, designer buyer.

"People bought sundresses, hats and evening gowns for events," said Elliott. Color has been strong, in tangerine, lemon and white sundresses by Michael Kors. The white pant has been a key item, also from Kors and Dolce & Gabbana, to mix with jackets. Giambattista Valli, Peter Som and Pamella Roland have also been key resources."Prices and the euro have been challenging, and American designers are using European fabrics," said Elliott. "Our open-to-buy doesn't increase because prices are up, so we have to edit more carefully."

At James Davis in Memphis, Cami Krablin said she has taken lower margins, as prices have increased, to protect customers. She also has dropped marginal lines or ordered fewer deliveries. "Some European vendors now require up-front minimums," she said. "If it's a line I need, I still have to go for it."

Armani is the number-one seller, due to "timeless versatility," said Krablin, who added that M Missoni and L.A.M.B. also are doing well. "Customers don't want something for a onetime event," she said. "They want to extend wear and expand their wardrobes." To entice customers, the store is increasing the number of events, including multiline trunk shows, upgrading interiors and offering more conveniences. "We're making our numbers, but we're working harder than ever," she said.

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