SWIMWEAR PRICE MELTDOWN UNDER WAY

Byline: Anne D'Innocenzio, with contributions from Michael Marlow, Los Angeles

NEW YORK--It's barely past Memorial Day weekend and three weeks shy of the official start of summer, but the annual swimsuit markdown ritual is already in full stroke.
On the East Coast, Woodward & Lothrop, which operates 15 stores in the Washington area, began slashing prices last Thursday, forcing local competitor Hecht & Co. to follow suit on Saturday.
In New York, Macy's and Bloomingdale's officially broke price Wednesday, with both announcing discounts in The New York Times of up to 40 percent on such labels as Gottex, Anne Cole and Sirena. And in Boston, Filene's started promotions Wednesday, following Jordan Marsh, which started marking down suits a few days earlier.
Even in California, where the promotional season typically breaks over the Fourth of July weekend, Gottschalks is now considering slashing prices this month, given the unseasonably cool weather.
"Our swimwear sales have been weak because of the cold weather," said Joe Levy, chairman and chief executive officer of the 31-unit Fresno-based chain.
On the other hand, Macy's West is sticking to its regular promotional schedule, according to a spokeswoman.
The move to slash prices, which occurred about a week earlier than last year's, was driven by unusually cool weather in May and the need to pep up traffic.
However, such a price-cutting frenzy, which has been happening earlier each year since 1990, doesn't please swimwear designers and manufacturers, who grumble that they'll be burned in the short run--and the long run, too. They say they're now faced with paying more markdown money than usual at the end of the season. They also expect that retailers, faced with unprofitable margins, will try to squeeze better ones from their suppliers next season.
But most importantly, swimsuit makers noted, such premature price slashing discredits the industry.
"I wish stores could at least wait until consumers wore their bathing suit at least once," said Eric Weitz, president of Robby Len, whose designs are sold at Filene's, Macy's and Hecht & Co. "It is the most basic economic theory of supply and demand. Why don't they just let the demand build a little? Top management has lost focus, and they are so nervous about meeting numbers in the short term."
Weitz pointed out that this markdown mania has also driven many manufacturers to shift to mass market channels.
"It is such a ridiculous thing for this industry to mark down suits more than 20 days before the official start of summer," said Shelley Bernstein, president of New York-based Roxanne, which markets moderate-to-better swimwear to department stores.
The firm pared inventory for the season by 40 to 50 percent in anticipation of early store promotions.
"It doesn't make sense in an industry that is so small, so dependent on seasonal business," said Bernstein. Stores, he added, lose profits by promoting too early.
"The earlier-than-usual promotions were something that we all feared but were hoping that would not take place," said Peter Rubin, president of Mainstream Swimwear and president of the Swimwear Manufacturers' Association. "We were hoping that the retailers were astute enough to see that swimsuit sales were slow because of the weather, not because the category has lost its luster." Rubin noted that the recent first-time educational campaign spearheaded by SWIM together with DuPont to get consumers to shop early for swimsuits failed to pump up sales. "The campaign was a little slow getting under way," Rubin said.
At least one swimwear manufacturer--Doug Arbetman, president of Sirena Apparel Group, South El Monte, Calif.--took the promotional frenzy in stride.
"The stores buy the goods," he said, "the store owns the goods and the stores run their own businesses."

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