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Resortwear manufacturers are focusing on basic strategies to energize business, from more marketing to lower prices.
The tourism-driven resortwear market has had a bumpy ride over the last year. The Sept. 11 attacks had a devastating impact on tourism, ultimately affecting resortwear makers, and now, after a brief uptick in business, sales are lackluster as the outbreak of war overseas looms.
“This season is kind of tight,” said Sandy Cuartas, president of Miami-based Ba-Ku Inc., which makes beach sandals and accessories. “It all started with 9/11. Now they’re thinking of going to war sometime soon, so people are being more careful and they don’t want to go on vacation.”
As they wait to see how the political and economic turmoil will unfold, resortwear manufacturers are focusing on basic business moves to stay afloat: more marketing, better customer service and lower prices.
Eli Cameo, president of New York-based separates line Needle & Threads, said the current situation reminds him of the Gulf War. Back then, resortwear companies also felt a drop in sales, but the war ultimately had a positive impact on retail spending. “Once this war fear is over, business is going to be booming again,” Cameo said. “People are going to start spending money again when they are not afraid anymore.”
Samir Ahuja, president of Grand Prairie, Tex.-based Sun ’n’ Sand Accessories Inc., a line of handbags, sarongs and other accessories, has a similar upbeat outlook about the war — despite a 20 percent decrease in orders. “It’s a little downturn, but I feel we’ve touched the bottom and war always helps the economy in the end,” Ahuja said. “As soon as this war is over, I think the market is going to be great. I think by August’s WWDMAGIC, we’ll have a different feel for this.”
Here are some other ways resortwear manufacturers are coping with the dip in sales as they head into WWDMAGIC:
BE WARY: As retail shops go in and out of business faster than the blink of an eye these days, manufacturers said it pays to be selective. At Ba-Ku, executives carefully check their clients’ credit background before making any deals. “I’m trying to make sure I have clients who are going to pay on time so I don’t have as much of an unpaid balance,” Cuartas said. Sun ’n’ Sand has taken a similar cautious approach: “We are being very careful about who we do business with,” Ahuja said. Sun ’n’ Sand had a troubling experience with a Florida department store that discounted its bags almost immediately, undercutting resort boutiques in the area. “We had a lot of complaints,” Ahuja said. “We were worried about losing our small store business, so we decided not to work with department stores anymore.” Now, when Sun ’n’ Sand clients sign a purchase order, they must agree not to put the items on sale for the first eight weeks.
This story first appeared in the February 18, 2003 issue of WWD. Subscribe Today.
SERVICE MENTALITY: A new emphasis on old-fashioned customer service gives resortwear companies an edge in this competitive market. “Lately, there is a lack of service in the market, so we conduct our business the old-fashioned way,” said Cameo of Needle & Threads. For example, its customers never reach an answering machine with a menu of buttons to push when they call. Cameo makes sure there always is a live person to help on the other end of the line. Also, his staff sits down with retail clients to seek constructive criticism on a regular basis. “We’re focusing on shipping less, making more money and providing higher-quality products,” he said.
Needle & Threads also prides itself on shipping reorders quickly, even if it means pocketing an expensive overnight delivery bill. “Customers really feel there is a lack of service in the market now,” Cameo said. “That’s why they shy away from the big companies.” At Sun ’n’ Sand, customer service employees have started to send retail clients an e-mail with information about how to track a shipment, when it should arrive and its contents. “We do so much more by e-mail now,” Ahuja said. “Customers really seem to appreciate being able to keep track of their shipments.”
HIT THE ROAD: Instead of paying for pricey full-page magazine ads or other marketing campaigns, resortwear manufacturers are hopping on planes to press the flesh. “We go to almost every show in the country,” Cameo said. “People like it when the product is right there in front of them and they can touch it and feel it.”
About two years ago, Needle & Threads reps stopped going to shows. Instead, they found customers were willing to visit the company’s New York showroom. But after 9/11, the visitors stopped coming, Cameo said. So he and his staff decided to travel to more shows again. In addition to attending WWDMAGIC twice a year, reps now attend the Miami swim show, Dallas and Atlanta market weeks, StyleMax in Chicago and the Orlando Surf Show. It was a move that brought immediate results: “Our customer list has tripled because of these shows,” Cameo said.
Los Angeles-based reps Ronnie Nathan and Ellyce Zolt, whose resort accounts include Cover Me and In Gear Fashions, also have been show-hopping. But they took it one step further and set up their own shows, in Hawaii and Washington State, with several other reps.
BRANCH OUT: To offset the drop in sales caused by war fears, some firms are seeking new ways to market their resortwear products. Until recently, Sun ’n’ Sand had only been selling handbags and coordinating sarongs to women’s boutiques. But the company has found a lucrative new niche: the gift market. Now, its sales reps are taking orders from both clothing boutiques and gift shops at each resort on their client list. Ahuja estimated gift shop sales now make up approximately 35 percent of the company’s business. “That has opened a completely different set of doors for us,” Ahuja said. “Before, we were so busy thinking we knew who our customer was, we weren’t thinking about who our customer could be.” Next, Sun ’n’ Sand will launch a line of matching mom-and-daughter handbags and other gifts for kids.
Headgear company Miracle Lace Visor’s owners also experienced a boost in sales when it started to sell its visors with prints that coordinated with different areas of Walt Disney theme parks. Thanks to the theme park sales and other profitable markets, the company reported total sales of $2 million in 2002 — up $300,000 from the previous year, said owner Toni Ledbetter.