STORES ASK: WHAT RECOVERY?

PARIS--Economic indicators and consumer confidence surveys might be pointing up in some European countries this fall, but soft goods business seems headed in a different direction.
Despite reports of upturns in the economy and in consumer confidence from England, Germany, Italy and France, apparel merchants in those nations don't seem to be sharing in the general bullishness. Only in Spain, among nations surveyed, are the economic and retail outlooks the same: gloomy.
There are exceptions, of course. The money is there, in many cases, but the consumer is much more careful with it. European shoppers tend to buy only when there is perceived value. The payoff, therefore, is coming to fashion retailers who have carefully identified their target audience and laid out a clear merchandising strategy.
"Stores can no longer blame the economy for their troubles," said Patrick Moylan of Kurt Salmon Associates in Cheshire, England, responsible for retail. "There used to be some excuses, like changes in consumer demand, or changes in demographics. The stores that are not doing well are those that were not in a position to capture those changes."
Following is a country-by-country roundup.

The U.K.
The economic upturn is firmly established in the U.K., with retail sales running almost 3 percent higher than a year ago, according to government figures. Clothing and footwear sales were up 5 percent from June through August, compared with a year ago, and retail executives say the trend has continued into the current quarter.
Even so, British consumers remain wary. Retailers worry that the recent rise in interest rates and the absence of tax cuts could dampen demand. Traditional retailers are facing increasing pressure from discounters, including outlet stores,warehouse clubs and U.S. chains like T.J. Maxx.
To compete with the everyday low pricing of giant Marks & Spencer, constant price promotions at stores like Debenhams have become a new feature of the retail landscape.
"The market is still quite fickle," said Andrew Jennings, managing director of the 56-store House of Fraser department store group. "We'll have two or three good weeks, and then it will slip back. But we think we'll have a strong Christmas."
House of Fraser's women's wear sales were up 13 percent for the six months ended July 30. Best-selling brands there and at Selfridges department stores included CK by Calvin Klein, Max Mara, Ralph Lauren and DKNY. The strongest categories were separates, coats and accessories. Dresses were difficult.
In the designer segment, the Jones chain said short dresses and skirts and glamour looks from such labels as Dries Van Noten, Martine Sitbon and Ann Demeulemeester were hot.Germany
Although German economic indicators point to recovery, retail sales have dipped 4 percent in the first nine months of this year, and the industry is bracing for a $1.35 billion (2 billion marks) drop in sales for 1994.
High fashion retailers, however, are faring better, with volume running only slightly off to even with last year, according to August Moeller, president of the Institute of German Apparel Retailers in Cologne.
There is more price slashing and competition in the German retail market, but sales have not improved. Meanwhile, high-end and middle-market retailers are pursuing private label to personalize their assortments.
The two Eickhoff specialty stores in Dusseldorf are bucking the trend.
"Only in July did sales in our stores fall drastically. But this was due to the heat wave we were having in Germany at that time," said owner Albert Eickhoff. "From August on, we have been running ahead of last year and have already made up for the loss incurred in July 1994."
He did not disclose figures.
Best-selling designers at Eickhoff included store leader Prada, along with Dolce & Gabbana, Gianni Versace, Antonio Fusco, Azzedine Alaia, Hervé Leger and Etro.
Middle market brands were also strong, including knitwear from Brunello Cucinelli and Cividini, and ready-to-wear from Nusco of Italy and St. Emile of Germany.

Italy
The most recent statistics for consumer spending in Italy show domestic consumption up 1.7 percent in the second quarter of 1994, compared with a year earlier. The consumer confidence index jumped 22.7 percent in September, compared with 1993.
Still, Italian retailers are glum about business overall, especially in the clothing sector. According to market research firm SITA-Nielson, clothing sales for spring-summer '94 fell almost 3 percent.
"People are substituting other goods or services for clothes," said SITA analyst Stefano Magistris.
Rinascente and sister store Upim experimented with Sunday hours in Milan and Rome, bringing in a lot of traffic.
At the privately owned COIN department store apparel sales increased 25 to 30 percent in September, according to Emilia Fornaroli, product manager. COIN's private label business, with the classic Foxton and trendier Stylo Noir brands, enjoyed particularly strong business.
Pupi Solari, owner of the multi-designer boutique under her own name in Milan, reported prices were up 10 to 15 percent this fall and that sales were about even with the same period last year. Solari's bestsellers included Alberto Aspesi, Antonio Fusco and Jil Sander.France
France, political leaders here pronounce, is supposed to be on the verge of recovery, but the country seems to have been in this position for months. Consumer confidence has been improving for almost a year, but spending on apparel and leather goods increased only 0.3 percent in July and 1.1 percent in August, according to government figures.
But spending this year and last year has been much lower than in the preceding three years. Despite this, apparel business in French department stores has improved, especially in the Paris flagships.
At Le Bon Marché, the Left Bank department store that anchors one of Bernard Arnault's major holding companies, women's apparel sales were up 13 percent for the first nine months of this year, compared with the same period last year.
Women's fashion director Christine Samain said it was because the store caters to an upscale customer and preselects her fashion choices for her.
"We want to be the most elite department store in Paris," said Samain. "We have a highly targeted offering, addressing a women who has [the means] to buy and providing the most pleasant service, making sure she will come back."
Bestsellers were labels known for constant creativity and evolution, like France's Irène van Ryb. Max Mara represented a strong brand providing value for money.
Le Bon Marché is introducing a new private label brand of fashionable classics called St. Germain de Près for next spring. This supplements the existing Edition Privée private label, which will get a trendier edge.
The store has only two annual sales, winter and summer, in addition to two promotional periods in March and October and does not have traffic-generating midseason promotions, as other stores do.
Constant sales confuse the consumer about price and are "very destructive to a store's image," said Samain.
At Victoire, the tony multi-designer boutique on Place des Victoires, sales were up about 5 percent so far this year.
"Before, you bought what you liked and saw," said Victoire boutique director Patricia Compain. "Now, you need to know what your customer wants."
Collections this fall, with their new colors, appeal to clients who had a hard time with black and grunge looks. Bestsellers, in order of importance, were Prada, Dolce & Gabbana and Bazarde Christian Lacroix. DKNY and Jil Sander also sold well.Spain
According to retailers here, the Spanish economy is caught between sluggish domestic consumption, showing a 2 percent increase between July and September, and unemployment soaring more than 20 percent. In addition, the economy is stung by high inflation and a huge trade deficit.
"There is no light at the end of the tunnel, and things could get worse," said a spokeswoman for Galeries Preciados, whose 30 stores make it Spain's second-largest department store chain. Goods with "the best price" were the bestsellers.
At Tres Zetas, a multi-designer specialty store in Madrid and part of the Zunzunegui retail group that holds Armani and Emporio Armani franchises, sales were up slightly, compared with the same period last year. Bestsellers included jackets and pantsuits from Armani.

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