NEW YORK — The talk of a return to a more tailored wardrobe hasn’t taken effect and the mood of the country remains far from celebratory — bad news for dress and suit firms.
According to an NPDFashionworld Consumer survey, tailored clothing purchases for the first nine months of the year fell 18.4 percent in dollars to $10.2 billion and 21 percent in units. Suit sales were off 17.3 percent in the period to $2.3 billion, while dresses and skirts plummeted 29.3 percent to $5.3 billion.
But ready-to-wear firms weren’t caught totally unaware and many have shifted their merchandising to more casual wares, while working to keep or increase market share as the vendor base continues to shrink. They also weren’t alone, as overall women’s apparel sales dipped 5 percent to $59.3 billion.
Rtw executives are looking for ways to forge sales gains next year, hoping that a more stable economy will bring renewed interest in the category and that the prediction of a more dressed up cycle finally occurs. Dresses and suits continue to rely on their affordable nature and are banking that when women do look to replenish their career and after-five wardrobes, the single-ticket sales will hold an advantage of sportswear separates.
Vendors are also taking steps to expand their businesses by diversifying the range of products they offer. Either in-house or through licenses, accessories, shoes and sportswear are among the extensions brands are taking for volume growth. Makers predict the trend toward feminine dressing for fall will continue into spring, boosting the sector.
Oscar de la Renta entered new markets this year — bridal and furniture — as the designer ended his stint as couturier at Balmain, in part to focus on his namesake collection, which experienced a growth spurt this year, according to Jeffry Aronsson, president and chief executive officer. Industry sources estimate the house brings in around $50 million in collection sales, plus more than $600 million at retail with licensed goods.
"The year 2002 is already a record year in sales for us and in overall sell-throughs for our retailer customers," Aronsson said. "While, as usual, we are cautious, we expect the crescendoing demand for Mr. de la Renta’s designs to continue and we are looking forward to a growth year fueled in part by increasing sales of existing products and in part by new product offerings."Aronsson said the pre-fall signature collection will be the most comprehensive the firm has ever produced. He said, "While this collection will present a number of Oscar’s signature evening looks, it will be focused more on special but versatile outfits that can take our customer from the office during the day to an important dinner at night. Given the focused nature of this precollection and its versatility, coupled with its early delivery dates, we expect it to maximize our retailer customers’ sell-throughs and real estate productivity, while giving us an expanded opportunity to sell more stock merchandise."
Aronsson said the firm has reorganized its systems for production to maximize an already improved focus on logistics, on-time deliveries, inventory management and customer service.
The company has just signed a lease to take an additional and contiguous floor in 550 Seventh Avenue to accommodate the needs "of a growing and more sophisticated organization," he added. "Mr. de la Renta’s vision for the space, all of which is being completely redesigned, is for it to be open and light to enhance the interaction between individuals and their departments. We expect to be completely resettled by the second week of May 2003, in time for our resort market."
Bud Konheim, ceo of Nicole Miller, said 2002 has clearly been a tough year, but the firm has been able to meet its flat sales plan by better editing and inventory control.
"The ‘A’ goods are great — it’s the ‘B’ and ‘C’ goods that are the problem," Konheim said. "The big increases are not there to get, so you have to concentrate on being more efficient. We had one of our most profitable years without any sales growth."
Konheim product extension is important, and Miller, which launched handbag and home goods lines this year, is negotiating deals for outerwear and coats.
Suit powerhouse Kasper ASL’s moderate-priced Le Suit line is expected to experience double-digit growth for the first half of next year. As a division of Kasper, president Gregg Marks said the line will be sold in more doors, resulting in a 30 percent gain in volume.
For the first nine months, Kasper has profits of $21.6 million against a loss of $29.9 million in the same period last year. Sales, which includes the Anne Klein sportswear division, fell 6.6 percent to $279.2 million. Kasper, which filed for Chapter 11 in February to alleviate debt, has said it plans to emerge from proceedings early next year."The bottom-tier doors is where we’re generating a lot of business," Marks said. "Doors with merchandise at that price point were underdeveloped. They’re going to be in a lot more doors than in the past and with everybody being money conscious, the value of a $99 suit is significant."
As for the Kasper signature line, it’s expected to be on par with 2002, added Marks. The company is planning for an advertising campaign — with a budget in excess of $1 million, according to industry estimates — that will be more lifestyle driven than some previous Kasper ad campaigns that were more image conscious. Shot on location in New York, the new campaign features a woman with her children going through her daily activities. It drops in the February and March issues of national magazines, though Marks said the company was still making final decisions on which ones.
"We think our woman is a career woman and the clothes will show her in her daily routine," said Marks of the upcoming campaign. "It will be reflective of how a woman wears our clothes."
Marks also said Kasper is experiencing an accelerated sell-through on black and navy basic suits that he predicts will continue in the coming year. Normally, those types of suits have between an 8 and 10 percent sell-through, but are currently running at between 15 and 20 percent, he said.
"People are nervous about income and jobs," Marks said. "When they spend, it’s on clothes that have more than one end use. They’re spending it on a navy suit they can wear over and over. The social dress business has been soft this year. People aren’t spending the money on something they can only wear on limited occasions."
Kasper is planning on opening five shop-in-shops in the first six months of next year at top department store locations, though final details are still in the works.
Sag Harbor Suits — in the Halmode division of Kellwood Co. —is expecting a 20 percent increase in its second year to $30 million, according to Jay Diamond, president of Halmode.
Denise Miller, division head, said much of that growth is expected from the brand’s petite and plus-size businesses, as well as through the expansion of retail doors, which is a key 2003 objective. She attributed the gains to the line’s value, which offers two- and three-piece suits for $150 and $165, respectively."We have the benefit of being part of Kellwood, so our sourcing possibilities are endless," said Miller. "I have a huge engine backing me up."
Miller also said women respond well to Sag Harbor’s powerful brand recognition and that the Sag Harbor sportswear customer has naturally embraced the suit line. To ensure that the customer stays hooked on Sag Harbor Suits, there is an attention to detail on jackets and skirts by way of novelty buttons, split detailing, and asymmetric hems.
While skirt lengths vary, a men’s wear trend — most notably vests — will be visible next year, according to Miller. Also, wardrobing concepts that include pants and a skirt with a jacket will be strong in 2003.
W. John Short, ceo of The Leslie Fay Co., said the fourth quarter has been tough after a strong early fall, but the outlook is brighter.
"Our first quarter looks much better," Short said. "We’re 25 percent ahead in bookings for spring and summer. We’re really focused on enhancing the price-value relationships of all our core brands. The economists are saying the economy has bottomed out, and we’re starting to see that, so I’m guardedly optimistic. There is concern over a potential war with Iraq, but if that does occur, my feeling is that it will be wrapped up quickly."
As reported, Leslie Fay signed an exclusive sourcing deal in July with Li & Fung (Trading) Ltd. in which the global trading giant is now fully responsible for all of Leslie Fay’s fabric and manufacturing sourcing worldwide.
During the past few seasons, dress house Diane Von Furstenberg has shifted to become nearly 50 percent sportswear. According to DVF president Paula Sutter, the separates trend is expanding to encompass a wider variety of knitwear and sweaters, which will be more prevalent with the fall 2003 collection.
"It’s really by the demand of the consumer and the retailer," said Sutter. "We’ve had an enormous success with the sweaters we’ve put out there and see it as an opportunity going forward."
Also on the horizon is the focus on developing and fine-tuning a solid retail strategy, added Sutter. As for licenses, the Von Furstenberg beauty line is widely anticipated and Sutter said there is the possibility for other licenses next year."We’re absolutely entertaining a business opportunity through licenses and strategic partners," Sutter said. "We’re looking at some of the opportunities that are interesting."
Meanwhile, Halston has shed its licenses over the past two years as the brand has tried to clean up its identity. Now down to five licenses, Halston chairman James Ammeen said the company is ready to start again, though details about new deals are still under wraps.
"I’m in discussions on one or two categories that could happen in early 2003," Ammeen said. "We’re formulating our strategy. I think the biggest challenge [in 2003] is an overall industry challenge. We’re in a difficult economic time, with a lot of pressure through the pipeline in terms of price and cost. There’s a lot of caution to the overall economic environment and worldwide political pressure."
Since Halston has been more selective with its distribution and licenses over the past two years, the next step, according to Ammeen, is to begin to expand distribution and product offering. Overall, Ammeen said he is expecting growth in 2003 and expects next spring to be up between 10 and 15 percent over last year, excluding licenses.
With the launch of a sportswear collection slated for fall 2003, the business at dress house David Meister is in expansion mode. Besides evening gowns and cocktail dresses, the line has broadened its reach to include daytime dresses. Eveningwear wholesale prices have increased slightly and now run $98 to $300. Daytime dress prices have remained flat.
"The brand has a consistent following at this point," said David Meister. "The addition of the day business has been very important and there has been a strong interest in it as well as embellished day-to-dinner dresses. Color and interesting silhouettes are key for spring and the support from Neiman Marcus continues to be phenomenal."
The brand will intensify its marketing, with an advertising campaign scheduled for the second half of 2003.
Meanwhile, Christian Knaust, president of Carmen Marc Valvo, said he expects to see a 15 percent increase in sales next year during the first and second quarters. Industry estimates put the total business at around $40 million to $50 million. The launch of a plus-size line during the past year has led to an increased business with department and specialty stores and Knaust said he expects that line to increase by as much as 25 percent next year."There’s a big void in the market for women’s plus-size clothes that look good," Knaust said. "People think because some women are large that they want to go around in a muumuu dress and that’s not true."
Trendwise, for Carmen Marc Valvo Collection, styles have been toned down to be softer, with accents like lace and unconstructed silhouettes. Those trends are expected to continue, according to Knaust.
Licensing at the company is an objective next year to expand the company’s offerings. Though Knaust would not disclose any details about any pending agreements, areas such as lingerie and shoes are on the top of his list that he said he hopes to get going in 2003. After that, swimwear, accessories and fragrance would hopefully follow, he said.
"We’re taking it very slowly and we’re picky with who we would work with," Knaust said. "It’s not a quick process."
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