Byline: Anne D'Innocenzio

NEW YORK--Once retailing's cash cow, the traditional moderate department store business has become a victim of fashion.
Its momentum was stolen by a fashion-at-a-price movement in the stores, which has spawned the industry's latest, and some say hottest, merchandise layer: upper moderate/low better.
Moderate's dowdy old drawstring pants and embellished tops have been dumped for the likes of slim-legged cigarette pants and shaped jackets, stores said. Traditional moderate makes up about 35 percent of the overall moderate category at retail, but observers say that figure is expected to decline as stores redirect their dollars into more updated categories that cater to a younger customer. But it's not only about youth: The once-loyal middle-aged traditional customer has also developed a taste for fashion, according to retailers.
Over the last six months, department stores such as Carson Pirie Scott, Strawbridge & Clothier and Younkers have seen flat or declining sales in traditional moderate business, which mainly caters to the 40-plus woman. In addition, Federated Stores is also finding the traditional business difficult, according to sources. Open-to-buys in the area have been or are expected to be reduced, some of these stores indicated.
Buyers point out that traditional styles, mostly oversize tunics and matchy-matchy outfits, have turned off their customer, who is now looking to other areas in the store, including updated private label lines or discounted better-priced fashions.
At the same time, the mass market crowd--especially Target and the industry's newest branded apparel player, Wal-Mart--is upgrading its fashion and capturing more traditional customers.
At department stores, the traditional separates business is posting only modest gains, while the coordinates area, which makes up the bulk of the traditional zone, is on the skids.
Retailers said some traditional moderate stalwarts--including Cricket Lane, Koret of California, Alfred Dunner and Teddi--have experienced softening sell-throughs over the past few seasons, and the malaise for many of these vendors has continued into fall.
"We still think we need to have merchandise that satisfies the traditional misses' customer, but we are really going after the 25- to 39-year-old," said Paulette Force, divisional merchandise manager at Strawbridge & Clothier, which has drastically pared its traditional base of moderate vendors for fall.
She declined to name the resources the store has dropped. But the retailer is funneling those former moderate dollars into updated lines offered by Chaus, Norton McNaughton and the Walter division of Pamela B., which was launched for fall.
"The traditional business is not a growth area for us anymore. The customer is looking for newness, and we have to move forward."
"We've maintained our traditional businesses, but it is certainly not growing," said John Freudenthal, executive vice president at Carson Pirie Scott, which reports strong sales in separates but weak sales in coordinates this season. In terms of the coordinates business, he added, "We haven't shrunk it--not yet at least."
"There are some pockets of the business, like certain separates resources, that are doing well, but in general the whole traditional area is flat," said Mary Ann Casale, general merchandising manager at Certified Fashion Guild, whose clients include specialty store chains.
Based on interviews with market sources, Casale said that many of the big department stores have begun cutting back on certain traditional misses' vendors. "The clothes just don't look that different than they did five years ago. There has to be some new styles offered, some great color, some reason for the customer to buy."
Obviously, the traditional moderate sportswear category has never been about cropped tops and hipster pants, but over the last year their commodity-driven looks have come under attack for many reasons. Mainly, the aging customer is becoming more sophisticated and is rebelling against what she believes are staid, overpriced fashions.
"The aging baby boomer is a lot different than the 40-plus woman 15 years ago," said Casale. "TV and other media are educating her about the latest fashions to wear."
Casale and others added that the consumer, once loyal to Alfred Dunner and other major brands, is also being offered more options elsewhere. As stores are expanding and sprucing up the upper moderate/low better area with such designs as slim-leg pants and quilted vests, the dullness of the traditional misses' areas is becoming more exaggerated, retail buyers maintain.
These contrasts are clearly visible to any shopper walking through the moderate sportswear area on the second floor of Macy's flagship. Upon entering the floor, a shopper is confronted with neatly merchandised bold fashions from INC, Macy's private label brand, and trendy branded looks like Walter, which fit into the upper moderate zone. For those a bit more conservative, there are structured jackets and other updated looks from such resources as Norton McNaughton and Melrose.
But as the shopper continues toward the back, she is confronted with something very different. The traditional sportswear area, which includes mostly overembellished tops and drawstring pants from such resources as Teddi, Cricket Lane and Alfred Dunner, is cluttered. Summer duds, now reduced by as much as 40 percent, are merchandised with fall styles that are mostly in beige, white or cranberry. Some of the clothes have either fallen on the floor or are lying on top of the racks.
There's also the issue of price. Given the stores' promotional frenzy, the traditional moderate customer can now afford to trade up to upper moderate or better price fashions.
"The average ticket price for a traditional coordinates outfit is about $150, but consumers can easily spend about the same price for a discounted better or upper-moderate line and get more fashion," said Thomas Burns, senior executive vice president at The Doneger Group, whose clients include regional department store chains like Nordstrom and Strawbridge & Clothier.
At the same time, while the rebellion against traditional moderate fashions will shrink that category, it won't kill it, say industry observers. Even as stores are cutting back their traditional base of vendors, they stress that they still need to hold on to that customer.
"There will always be that woman from Milwaukee who only wears drawstring pants, but that base is shrinking," said Casale of Certified. "At the same time, the blue-haired lady isn't blue haired anymore. You can't keep pushing outdated fashions. Stores have to walk a fine line."
"The traditional business is not dead; it just has to adjust to the new climate. In order to survive, traditional companies have to be more creative and more in touch with the retailer and the consumer," Burns said. "And they have to do two things: They have to update their lines a bit to meet the demands of their traditional customer who has changed, and they also have to branch out to the younger customer."
Several traditional misses' sportswear companies are heeding the call. According to retail sources, Alfred Dunner is already expanding beyond its commodities-driven business in favor of button-front jumpers and short jackets for fall selling. Dunner officials declined to comment.
Koret of California has updated its signature line for fall and is considering an even more updated line for fall '96, according to Fred Smeyne, senior vice president.
Smeyne conceded that sales in the traditional vein have been soft "since the fall of '94" but added that the company's more aggressive approach to fashion has reversed the slide.
And Counterparts, a division of Casablanca, has stepped into the upper moderate/low better zone with Frameworks, which offers slim-leg pants, flippy skirts and three-button jackets.
The changing climate has also led the Peter Popovitch Inc. division of Miami-based Mishy Sportswear to change its merchandising strategy. For spring selling, it has unveiled Popovitch & Co., which is more updated than its signature line and offers novelty vests, safari jackets and 34-inch skirts, according to Steve Cohen, executive vice president of Mishy Sportswear.
Popovitch & Co. is geared to 30- to 50-year-old customers and competes with such labels as Chaus and SK By Jessica Tierney. The line, which offers such fabrics as linens and cottons, wholesales from $28 to $30 and is expected to generate sales of $4 million in its first year.
On the other hand, the company's signature label--Peter Popovitch--targets 50- to 70-year-olds and is aimed at the low end of the moderate zone, competing with such labels as Koret and Alfred Dunner. The line, which wholesales at about $21, features mainly polyester/cotton blends and acrylics.
"We had to offer more fashion, more newness to the customer," said Cohen.
At NCC Sportswear, a moderate-price knit-driven sportswear company based here, company officials are now rapidly changing Agenda, which was unveiled three years ago as a traditional coordinates line but is undergoing a facelift.
"When we first started out, we did a major push in tunics and coordinating tops and bottoms," said Bob Cesaria, vice president of the company. "But every season, we started seeing fewer and fewer sell-throughs. We had to change."
Over the last six months, the company started to push novelty items. For spring, the line --which is in major department stores--includes knit sweaters cropped to the waist, as well as vests and slim pants. The fashions wholesale for $8 to $18.
The new strategy is working, according to Cesaria: "We are starting to see very good sell-throughs and more demand from the buyers for these looks." He said the line is expected to post $8 million at wholesale this year, compared with $5 million last year.

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