NEW YORK — They’ve gone on a diet and have gotten in shape, and now moderate and better sportswear firms are ready to tackle a challenging year ahead.

The key words are "lean" and "fast," as in cutting the fat out of inventories and being able to respond quickly to emerging trends. This strategy has come to the front during a time when shoppers are waiting longer and being more prudent with their dollars, and are buying more in season.

Companies know they need to walk a fine line between not overloading stores with too much of the same merchandise, while also introducing an edited assortment of new products that seem to magically answer shoppers’ wants.

That task is easier said than done, as apparel makers and designers must learn how to effectively market to this "new" consumer who is interested in value and convenience — and not interested in shopping every store to find that, said Marshal Cohen, co-president of NPDFashionworld, the Port Washington, N.Y.-based national consumer-tracking firm.

"We’re going to be in another consumer’s market," said Cohen, adding that total women’s business will be relatively flat for 2003. "Once again, we are in a year where there’s no emerging fashion trend and without any must-have item, women will continue to buy a few items here and there and price will be a driving factor. You’re no longer in a business of wardrobe obsolescence."

The moderate and better sportswear market represents 55 percent, or $40 billion, of total women’s sportswear, not including juniors. This meat-and-potatoes middle tier is expected to grow 3 percent in 2003, all based on the premise that consumers are gravitating toward value, Cohen said. However, this year, the sector fell 2 percent based on sales through October.

Kathy Bradley-Riley, merchandise manager for sportswear at The Doneger Group, a retail buying office here, said: "The stores have been keeping inventory levels down for about a year and it’s a good strategy. Constantly looking at inventories is helping them to be more profitable and making them stronger. It’s the same thing for manufacturers. If they keep their inventories in line, volume might not go up tremendously, but they will be more profitable."Peter Boneparth, chief executive officer and president at Jones Apparel Group, said the company will be maintaining a conservative posture in terms of sales and inventory.

"In this company, there will be pockets of opportunity that are growing quite quickly, such as footwear, accessories and jewelry, but overall, we remain cautious," Boneparth said. "The good news for spring is we think stores will be in good shape, in terms of inventory, so we think they’ll be able to flow receipts. We don’t see anything on the horizon that’s catastrophic, but we don’t see anything that will catapult the consumer in a major way."

Boneparth’s tempered message echoed what many mainstream sportswear makers forecasted for 2003. Yet, even during these bleak economic times, companies need to grow their top lines. For Jones, its strategy remains consistent: Stay focused on brands that can be extended across categories and layer in selected acquisitions.

"In every case, we’re looking to maximize product opportunities," Boneparth said. "But as a $4.3 billion company, it’s not realistic to grow 10 percent without doing some acquisitions. We will continue to look for acquisitions and the acquisitions of LEI and Gloria Vanderbilt have been good. In this kind of environment, there are opportunities for people who are large and well-diversified and they actually become more evident. The reality is there are very few buyers out there — there are only two or three of us."

On the same note, Paul Charron, chairman and ceo of Liz Claiborne Inc., said business will continue to be challenging.

"There will be a premium [placed] on responsive strategies and consistent execution without taking inappropriate chance on inventory," Charron said. "Most people will continue to plan their business conservatively. "I’m not…going to take chances on inventory that’s not going to move at a decent price. The economy is actually a little bit better than it was earlier this year, but uncertainty about war, concern about terrorism and the Middle East issues makes me temper my [outlook]."

For the nine months ended Sept. 28, Claiborne reported income was up 15 percent to $173.2 million. Sales increased 6.3 percent to $2.72 billion, as reported.Charron said the key challenges going into the new year will be to continue to "execute with precision and manage your inventories very carefully."

"We on the wholesale side are going to have to work very closely with our retail partners to optimize in-store presentation and sell-throughs," he stressed. "The consumer will buy products at regular price if we won’t clutter the floor with things that are 30, 40, 50 percent off."

Like Boneparth at Jones, Charron said Liz Claiborne is always on the lookout for possible acquisitions.

"You should assume that we’re always in dialogue with someone about something," he said. "Our focus is fashion at multiple price points and we think the concept of diversity resonates at multiple price points. I’m looking for acquisition opportunities that are varied, that could be in men’s, accessories and could have specialty retail legs."

Charron said his goals going into the new year will be to continue to be "effective and efficient" in the execution of strategies, while being responsive to the needs of the company’s customers and consumers.

"We’re going to manage our business tightly and managing your business very carefully is central to the success in the coming year," he said, adding that while ongoing cost reduction is regular, he doesn’t anticipate any extraordinary cuts.

"I don’t think we can afford to bet that we’re going to get any real pickup [in the economy]," he added. "I can’t bet on a turnaround. I’m not an economist."

Lou Breuning, president of August Silk, said based on strong sell-throughs recently, he has reason to see a continued positive performance going into the new year.

"Maybe it’s the [colder] weather or people’s willingness to buy," he said. "We’ve had to make some changes and have gotten younger and more novelty driven."

For the first and second quarters, he anticipates a 20 percent increase in volume versus last year.

"There’s a concerted effort to diversify our product, but everything is still value driven and focused on key items," he said. "You just can’t keep staying with what you have. It’s about a proper balance."Executives from Jones and Claiborne to August Silk and Ballinger Gold agreed that being able to react quickly to what’s selling and cooperating with retailers are becoming more crucial factors.

"We’re turning some of the fast-track business anywhere from six to 12 weeks, which is very fast," said Heather Pech, group president at Jones. "It’s an important initiative at our company and our turns, specifically in the casual business, have increased 20 percent and that’s due to keeping inventories lean and also reacting to the business."

Flexibility is an offshoot of these new practices, as well, said Jones’ group president, Mark Mendelson.

"It’s new for retailers to come in and see us so flexible. It’s positive and they’re on board," Mendelson said. "It’s about being flexible so the buyers can come in here and we can run the business together. The bottom line is we’re putting the emphasis on the consumer. She’s in control. Nobody tells her what to do and if we don’t get her what she wants, we lose."

If retail business continues to show strength, like the pickup over Thanksgiving Day weekend, retailers should walk into spring more receptive and open to new goods, said Bernard Holtzman, president of Harvé Benard.

"Our spring business was slow in starting, but is strong now," said Holtzman, who had planned business flat for next year. "People have seemed to wait until they knew they had to commit. Yet there seems to be a huge demand for new product, so I think we’ll be a little ahead."

He noted that the firm’s new Nero line, a collection of all black separates that bowed for fall, is doing well and should comprise 20 percent of the company’s $100 million volume for the year.

Business might be more upbeat, but an air of conservatism still prevails up and down the food chain, remarked Jamie Gorman, vice president of sales at the moderate-priced Ninety.

"Buyers are being cautious through the end of the year; however, they do need spring goods and are booking orders," Gorman said. "Business is consistent — not up, not down. I am planning on doing better next year, however, because our business has grown."Angela Ahrendts, executive vice president at Liz Claiborne, said: "People aren’t going to spend money on things they already have, so fashion has to evolve. And if they are going to part with their money, they want more investment-type pieces."

New product categories like cut-and-sew T-shirts and head-to-toe knit dressing have helped propel sales 5 percent ahead for spring at White + Warren, a better-priced knitwear company.

"It’s all coming from mixing knits and wovens, and different new details like new trims and edges," said Susan White, a partner in the firm. "Business now is good. We just shipped holiday and it’s doing well, too."

Designer Sigrid Olsen said the challenging business today demands that designers get more creative.

"Anything new that we’ve done has gotten a huge response from retail buyers," said Olsen, the name behind the novelty-driven, better-to-bridge Claiborne unit. "It’s a lot of work because you can’t just rely on any styles or formulas. So our silhouettes are much more novel and trend-right, and not just about relying on the same silhouettes. We’ve injected a younger attitude to fit this consumer."

After backing off advertising for fall, spring will mean a renewed push in this direction at Sigrid Olsen, starting with a national campaign with placements in major magazines like Elle, Vanity Fair, In Style, Real Simple and Marie Claire.

"Our business is just kind of slow and steady," Olsen said. "We’re still growing, and while we’re not making huge increases, we have a solid and healthy business. We just try to sell what’s right and what will sell through."

The new year also looks bright for the recently reorganized Ballinger Gold, a better-to-bridge sportswear line, said Thomas Burns, president. The company does about $10 million in sales, but by the end of next year, Burns expects between a 20 and 25 percent increase.

"We have a stronger brand equity and momentum carrying us into the first quarter, resulting in low-double-digit increases. With a little luck, there isn’t any reason why we shouldn’t continue that level of success through the year," said Burns. "To accomplish our goal, we’re spending more time on marketing directly to the retailer through a program of direct-mailers and trunk shows. This is important as we continue to see a decline in traffic."Tracy Geller, director of sales and marketing at better-priced sportswear maker Lynn Ritchie, pointed to the company’s whimsical, novelty printed T-shirts as a reason for a sales increase this year that is expected to continue next year.

"Our sales are being driven by impulse buys," she said. "The customer also appreciates the fact that they are priced well."

Perhaps a reflection of consumers’ thirst for value, Jones’ Boneparth said the company’s moderate business has seen growth, particularly at Kohl’s and J.C. Penney Co. He expects a high-single-digit growth rate in the moderate area overall, with some brands like Norton McNaughton expected to achieve single- to double-digit increases, while Nine & Co. is the company’s fastest-growing line.

Along that vein, business is projected to increase roughly 20 percent for the first half next year at Milano Manhattan Ltd., a moderate and updated company, said Garry Bennett, vice president of the firm that does about $25 million in annual volume.

"Blouses and sweaters are doing well due to the value and styling," said Bennett. "The success is partly due to using less-expensive yarns and some yarns that are new and exclusive to our brand."

Saying consumers today want fashion with a forgiving fit at moderate prices, Lisa Minardo, president of the moderate, updated Biyaycda line, which does about $40 million in sales annually, said her business looks good for the first half, with bookings up 30 percent so far.

Minardo, whose pieces wholesale for about $12 to $14, said: "What has happened is that everyone has started to finally get it. Before, we were considered too fashionable or too updated, but people started recognizing this is not just about making elastic-waistband pants for this customer. Just because she’s 40 or 50, doesn’t mean she isn’t fashionable."

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