LOS ANGELES--Anticipating the retail consolidations of the past few years, Carole Little, a division of California Fashion Industries Inc., the sportswear giant here, took steps to insure its place in better department stores. It restructured its sales force, remerchandised and expanded its product line, and installed high tech equipment to help facilitate growth. Although company co-chairman Leonard Rabinowitz didn't hit the $400 million wholesale mark he initially projected a year ago, the actual figure still reflects substantial growth. Carole Little is expected to generate $385 million in wholesale volume in 1994, compared with $280 million in 1993, he said. "We were in the midst of moving our warehouse earlier this year and were late with some spring deliveries," he explained. "The Northridge earthquake closed several of our distribution points. Apparel sales in general were sluggish in the first and second quarters, too. In the past six months, women didn't like the clothes out there. They didn't like neutrals. It was boring." That's changing. Company co-chairwoman and designer Carole Little is rolling out men's wear-inspired pinstripe suits and casual sportswear in hot bright colors for holiday and resort. The company now comprises six better-priced divisions: Carole Little career wear; Carole Little Sport, which is casual career components; Carole Little II, the plus-size apparel division; Carole Little Petites; Carole Little Dresses, and Carole Little Streetwear, a one-year-old casual clothing label. Carole Little Street- wear has more advanced styling and forward silhouettes than Sport, which is casual and weekend dressing in washable fabrics. For holiday-resort, Streetwear includes racing sweaters, dresses, silk parkas, nylon fireman jackets and quilted vests and wholesales between $18 and $68. Sport includes multicolor embroidered skirts, ornate jacquard cardigans and vests, shaker knit sweaters, parkas and stirrup pants, wholesaling between $18 and $68. Rabinowitz said that this fall, 27 of the 30 stores the company is tracking are beating plan. Weekly sell-throughs of Streetwear are running at 10 percent across the board. Weekly sell-throughs of Carole Little career at Bloomingdale's, for example, are running at 10 percent, according to Rabinowitz. "I used to say that the garment industry is one of the last Cinderella industries," Rabinowitz said. "Well, it's not anymore. It's difficult for the little guy to make it into a department store now. A few years ago, Bullocks had a buyer in every store. Pasadena Bullocks looked different from Beverly Center Bullocks. Now, there's one buyer for maybe 100 doors. These buyers want large manufacturers they can rely on. Now it's a challenge for us to be creative, so that all the stores don't look the same." The extensive collection is prominently featured in various department stores, including Dillard's, R.H. Macy & Co., May Co. stores, Federated stores and Dayton Hudson stores. Overruns are carried by discount or mass retailers, including Burlington Coat Factory and Marshall's. In addition, merchandise is available at the company's own 28 outlet stores across the country. Locations include Aspen, Colo.; Harriman and Riverhead, N.Y.; Monterey, Reseda and Brentwood, Calif.; Orlando, Fla.; and Hilton Head, S.C. "We have established distribution channels, and that's pretty much where our merchandise goes," Rabinowitz said. "There are no diverters in apparel like there are in commodity businesses such as cosmetics." Department stores seem pleased with the progress they're making with Carole Little's lines. Janice Barni, buyer of Carole Little career and Carole Little Sport for Macy's West, said, "Our relationship with Carole Little is more of a partnership." Macy's West carries Carole Little's career line in 432 doors and Sport in 40 doors. "They've come through for us when we've had stock problems, and in turn, we've given them prime floor space. We constantly go over our sales. If things aren't trending, we sit down with their division heads and figure out how to turn it around. Their shipping is incredible, too. We get shipments on the first of the month, not the fourth week," said Barni. "Their July and August groups are strong. Weekly sell-throughs are between 5 and 10 percent. That's nothing to scream about, but it's good news, considering that this past spring, when it was tough across the board, some groups were turning at 2 percent. "We're trending upward. Sales of the Sport division is 92 percent ahead of plan for August. We'll probably do $230,000 [in retail dollars] in the division for the month. Our original projection was $100,000 [retail]," she said. "The line is looking more contemporary. For holiday, there are men's wear-inspired looks, in addition to soft, floral, two-piece dressing," said Barni. "For resort, there is color: A strong naval look in red, white and blue as well as bright colors--yellows, fuchsia, sky blue and turquoise. Their knits are reaching a new level. It's more seasonless. It's not gold and glitzy." Lou Virag, senior vice president of ready-to-wear for Bon Marche, in Seattle, said, "We believe very strongly in the Carole Little line, not only in the short term, but in the long term." The store carries Carole Little in 18 doors. "It's a valuable player across all misses' divisions: dresses, sportswear, petites and plus sizes. Second and third quarters have been sensational across all divisions. Our customers believe in the line. The resource is performing percentage-wise at high double digits ahead of last year for the fall season, which started in August. "Sales are considerably over plan and over last year. Some of the factors behind this include: First, the Carole Little name itself has strong customer acceptance for styling and value. Second, the company's delivery situation--which did have a hiccup during the first quarter--is straightened out. And third, soft dressing is what people want now. They have a good understanding of soft, better dressing." Virag also noted that Carole Little has "strong division heads who work very closely with our people." "They are constantly on the phone, and they communicate well. All their division heads have retail experience, and that makes for better communication with retailers," he said. Rabinowitz relies on technological advances to track progress of his growing empire as well as increase his business. "I spent $300,000 on an advanced notification-of-shipping program that lets my retailers know by computer when a shipment leaves my warehouse and what's coming through use of bar codes," he said. "In order for the technology to work, participating retailers have to spend a lot of time with us. They justify it by buying several divisions of Carole Little instead of just one." Another way he grows the business is via the information superhighway. Six months ago, Rabinowitz wired fiber-optic cables into his facilities and installed an interactive television studio on the premises. "We broadcast a show here several times a month," he said. "We can talk to 1,000 department store sales associates at a time--show them new products, discuss fashion trends, give them selling tips. Macy's and Dillards are both on line, and we are talking to Federated now. We also use it to communicate with our production and sourcing people in Hong Kong." Despite his embrace of new technology, however, the co-chairman doesn't buy into the notion of high tech retail. "I don't think QVC works," he said. "The department store is still a full-service, one-stop shopping experience. Department store sales are up consistently every year--not by much, but up. Women who are going to spend several hundred dollars want to try the stuff on." "Building a business relationship with retailers means being on their turf," Rabinowitz continued. "Once a month, I hop on our nine-seater Falcon jet with our senior vice president director of sales, Michael Winter, and our six division heads and we fly to a city. A typical visit means going to three doors, walking around with retail floor managers, making recommendations that usually involve issues of presentation, and then going back to meet with the ceos. We often take some senior designers with us, too. We want them to see reality. It's too easy to get caught up with the Los Angeles scene. The Beverly Center, Rodeo Drive--that's not reality." Lack of space is a reality at Carole Little's downtown headquarters on Martin Luther King Boulevard here. The company, founded in a 2,500-square-foot-warehouse 20 years ago, has now outgrown its 200,000-square-foot-complex. "We're crunched here," Rabinowitz said, adding that he plans to donate the property to an organization that would convert it into a charter school for inner-city children. He has already implemented a massive company relocation plan that is expected to take two years to complete. The new site--a 500,000-square-foot building that was formerly a May Co. warehouse--is less than a mile away. So far, only the shipping department is there. Customer service and production departments will go next. The design department will be moved last. "I'm upset at what's happening with the city," said Rabinowitz. "A lot of kids here are not getting an education. Classes end at 2:30 p.m. and they have nowhere to go. There are no after-school programs in the inner city" Rabinowitz said the property gift is worth $12 million, a figure he hopes the community will match. The money would be used as working capital for the school.
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