NEW YORK — The changing dynamics of the lingerie and retail industries brewed a mix of anxiety and anticipation at last week’s fall-holiday market.
Several factors contributed to the apprehension of several large and small vendors, including the announcement March 1 that Federated Department Stores will acquire May Department Stores.
A majority of manufacturers believe this will further consolidate retail channels in a rapidly shrinking marketplace that includes the proposed merger of Sears and Kmart, and the disclosure by Sara Lee Corp. last month that it plans to spin off its Sara Lee Branded Apparel unit into an independent company.
At the same time, industry executives said the consolidation of major stores could open up an avenue of opportunity for smaller, specialty operations.
“This could be an opportunity for manufacturers to focus on specialty retailers once again,’’ said Tobie Garfinkle, vice president of merchandising for Liz Claiborne Intimates. “There’s a lot of business that could be cultivated.”
Retail turnout at the Lingerie Americas trade show here underscored that point. Patrice Argain, chief executive officer of Lingerie Americas, said attendance was up 15 percent compared with a year ago, totaling 2,475 visitors. The opening Sunday of the three-day fair pulled in about 1,000 visitors, he said. While the bulk were from specialty stores, there also were a number of major department and specialty stores as well as catalogue and e-commerce businesses.
“Buyers came in not only substantially larger numbers, they also spent an average of two full days at the show,” Argain said. “They came from outside the Tristate area, particularly from Florida and California.”
Meanwhile, executives at some of the major firms said they were pleased with the prospect of partnering with a new breed of retail giants and they applauded Sara Lee’s spin-off strategy. However, executives at smaller and midsized innerwear firms who are not big players on the Federated or May matrix said they were worried about being squeezed out. The main concern was being able to comply with a growing litany of requirements from huge retail groups that generate a profit for themselves, but little if no profit is left for the manufacturer.
“Either you go along with the demands, or they tell you to take the highway,” said one executive who did not want to be identified. “It’s only going to get worse for the little guys.”The angst was further compounded by the Saks Inc. announcement last week that it intends to repay vendors $21.5 million after an internal investigation involving the improper collection of vendors’ markdown allowances. It is a common practice among major department and specialty stores when dealing with lingerie and sleepwear companies, vendors said.
“I had to stop shipping Saks because I could never make a net profit,’’ said Samantha Chang, designer of ready-to-wear and lingerie that bears her name. “The number of chargebacks just kept on growing. I wrote, faxed, e-mailed and called, but I always got the runaround and was always told to talk to somebody else. I spent so much time doing that that I didn’t have time to design. They still owe me money.”
Unlike bridge sportswear and accessories, which constitute a big chunk of markdown deals, lingerie also is a markdown target because it is among the highest-margin businesses at stores. It’s considered a risk-averse sector that is promoted year-round and is anchored in commodity goods, not seasonal fashion items. Margins differ among retailers, but typically range between 45 to 52 percent, and as high as 59 percent, vendors said.
“It’s been a very interesting market and it’s far from over,” said Richard Leeds, chairman of Richard Leeds International. “You’ve got the midtier [department] stores and chains like Sears as well as mass retailers such as Wal-Mart and Target coming in. At the same time, a lot of people are going out to see retailers.”
Leeds said two licensed characters have been “hits” with a sophisticated redo: Barbie and Wonder Woman.
“Victoria’s Secret really loved the attitude of Barbie and Wonder Woman,” Leeds said.
Kathy Thomas, sales executive at JD Fine, said, “I think retailers are really aggressively out there looking for the next great thing that will make their cash registers ring. Everybody is looking for a lot of fashion but at a great price. It’s been a terrific market, but it’s become a three-week market. Federated came in the first week, a lot of people came in last week and the third week is dedicated mainly to May Co.”Jessica Mitchell, senior vice president of sales and brand development at Natori Co., said, “Everybody loved the wear-home and wear-out concept of the Josie Natori Collection, now in its second season. Colors like wild pink, peacock blue, imperial yellow, black, ivory and gold received strong reaction. People are buying four colors and plan to hang them like a candy store.”
Mitchell added that key items include silk camis with a French antique-pattern lace overlay, allover lace jackets and crinkle silk chiffon and silk charmeuse tunics.
Anne Caetano, president of the luxury division at the Komar Co., said reaction was strong to a new licensed sleepwear brand by Le Mystere. The collection is designed by Ricky Lizalde, vice president of design for Komar’s luxury brands division.
“The daywear items can be worn with jeans, and many pieces can be worn at a spa, on a patio or hostessing a cocktail party at home,” Caetano said. “This is also for a lot of women who work at home. Retailers expected to see lace and pink and baby blue, typical lingerie colors. But they said they were surprised because it’s different than anything they’ve seen out there.”
Styles include softly brushed honeycomb-pattern robes of lightweight cotton, Empire chemises with braided detail that support the bustline and draped long sleepgowns that have an rtw flavor. Fabrics include polyester microfiber jersey, Modal and silk and rayon ombré velvet.
Retailers generally said the market extolled a wealth of newness and fashion product.
“At the Lingerie Americas show, we observed a strong trend toward luxury brands continuing through fall ’05,’’ said Maureen Stabnau, senior vice president of merchandising at Bare Necessities, a lingerie chain based in Newark, N.J. “We’re considering adding ID Sarrieri bras and Leigh Bantivoglio camisoles and chemises. We also see the continued expansion of the trend toward lace and vintage looks.”
Heather Taylor, owner of A Tropical Affair, a lingerie and swimwear boutique in Santa Barbara, Calif., said, “It’s really been a great market. We have a very label-conscious customer. We are a travel destination, have a very wealthy clientele and we are a bridal capital.”Taylor said in addition to best-selling brands at her shop — including La Perla, Dolce & Gabbana, Aubade, Cosabella, Mary Green, Khurana, Jonquil, Love Tanjane, Wendy Glez and Bedhead — she plans to order two brands for the first time: Ying Li’s hand-painted silk daywear and sleepwear, and underwear by Undie Moon.
Mary Sue Shade, owner of Bonne Fitte, a two-store chain in Traverse City and Howell, Mich., who attended the Lingerie Americas fair, said, “This is the first market I’ve come to and it’s wonderful. It’s been my reps who have attended before. I cater to the customer who wants unique product and I’m finding it.”
Shade noted that she was reordering lingerie by Fantasie of England, Jezebel, Felina, Arianne and Huit.
“Huit will give you any point-of-sale material you need,” she said. “They’re great.”
Shade said she ordered four resources for the first time: Aubade, Elila, Volage and BB Curves.
Cheryl Sloane, an owner of G Boutique, a specialty lingerie and sex-toy shop in Chicago, said, “Business is over target, up 30 percent against February 2004. We ordered several new resources at this market for our boutique, 2Belles, Elle Macpherson and Rigby & Peller. We also reordered maternity and nursing items from Bellabumbum, l’Arrivo and Daniella Simon.”
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