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Malls Are Desperately Seeking New Apparel Concepts

NEW YORK — Retailing, by its very nature, is a Darwinian proposition, and the hunt is always on for new retail concepts. <br><br>The Gap has said it is reducing expansion and is making no commitments for 2003. (For the first time in 2 1/2 years,...

NEW YORK — Retailing, by its very nature, is a Darwinian proposition, and the hunt is always on for new retail concepts.

The Gap has said it is reducing expansion and is making no commitments for 2003. (For the first time in 2 1/2 years, the company last week posted positive same-store sales results.) Eddie Bauer, Wilsons Leather and BCBG are pruning locations, and J. Crew’s expansion is on hold. In addition, the first wave of so-called entertainment retailers has hit the skids. The Disney Store is scaling back its chain from a high of more than 500 stores in the U.S. to about 350 by 2005. Warner Bros. Studio Store was phased out last year, and the Discovery Zone was forced into bankruptcy.

“It’s just a natural evolution and goes in cycles,” said Michael Ewing, a principal of Williams Jackson Ewing, a retail developer based in Baltimore. “Anyone trying to do a new center today has so few retailers to choose from. That’s hurting a lot of people. There are just fewer prospects.”

It’s a telling sign that one of the few new chains for women is Adrienne Vittadini, a 23-year-old brand that peaked in 1990 with a volume of around $110 million wholesale. While it was an important fashion resource in department stores, the collection disappeared as the bridge market sank in the late Nineties.

Retail Brand Alliance, the owner of Casual Corner, Brooks Bros. and Petite Sophisticates, acquired Vittadini in 2001, and is giving the brand a second life. The company hopes to have 30 stores, ranging in size from 5,000 to 6,000 square feet, operating by October 2003, and malls are eager to welcome Vittadini.

“It’s a brand-new apparel tenant in a category — bridge — that’s been very challenging,” said David Weinert, group vice president for leasing for the Taubman Company.

Carolee Design Inc. was also purchased by Retail Brand Alliance last year and the company has been sinking money into a chain of jewelry and accessory boutiques for the brand.

“There’s nothing happening out there,” said founder Carolee Friedlander, president and ceo. “There’s not a lot of investment in retail. I’m excited that we can forge ahead with a new concept in a pretty dull world. There’s not a lot going on in rtw and not a lot happening in department stores, which is our major channel of distribution. People have pulled back funding new ideas and new concepts.”

But most of the new chains on the horizon are either siblings or extensions of already successful concepts.

Chico’s, whose comfortable bulge-concealing fashions have been embraced by suburban soccer moms and urban baby boomers, is rolling out Pazo, aimed at 25-to-35-year-old fashion-conscious women, next year. Styles will be fitted and structured, for a woman “who wants to show off her body,” said a spokesman.

Chico’s saw a void in the marketplace, with Abercrombie & Fitch and Wet Seal chasing the 18-to-25-year-old crowd. “After she graduates from those chains, the customer has to step up to The Limited, Express or Banana Republic, but she really doesn’t have the wallet for that,” the spokesman said. “At Pazo, she’ll be able to buy a whole wardrobe for a reasonable price.”

Bebe Sport, a casual concept from Bebe, features active, street-inspired styles in denim, fleece, knits and velour, with an average price point of $45. Stores have concrete floors, brushed steel and frosted glass fixtures. The first two will open at the end of the month in Paramus, N.J., and San Jose, Calif., and five more are slated to bow in December.

Tom Curtis, general merchandise manager of Bebe Sport, said the brand will espouse Bebe’s core values. In other words, it’s all about a sexy fit. The stores are geared to women 18 to 35, but may attract an older customer “who’s in their 40s or 50s, is in good shape and wants a sexy look,” Curtis explained.

In general, retailers are targeting younger and younger customers.

Forever 21, a trendy junior chain based in Los Angeles, introduced XXI Forever, which is not so much a new concept as it is a new format. Stores are three times as large as Forever 21 and carry an expanded product line for juniors, young adult men and women.

Torrid by Hot Topic is filling a niche the fashion industry has left virtually unexplored: large-size clothing for teens. By year’s end, Torrid will have opened about 30 units, ranging in size from 2,500 to 3,000 square feet.

It’s no coincidence that many of the new chains are geared to teens. The group spent $172 billion on apparel in 2001, according to Teenage Research Unlimited (TRU), or about $104 per week. But the field is crowded, and teens spent 23 percent less on apparel this back-to-school season than last year, according to NPD Fashionworld Consumer in Port Washington, N.Y.

In addition to Mishmash, it’s new sportswear, lingerie, cosmetics and accessories chain for teens, Too Inc. is introducing Goldmark, a joint venture with Australian jeweler Angus & Coote, for the 14-to-29-year-old demographic. The first store, which opened recently at Easton Town Center in Columbus, Ohio, is a test. If all goes well, four more Goldmark units will open before the end of the year.

Retailers see opportunities in the children’s arena as well. Could it be that baby boomers — the most self-involved generation of all time — have finally found someone they enjoy spoiling more than themselves?

“There’s a shift from adults to children,” said retail consultant Barbara Ashley. “Baby boomers are putting more emphasis on their children. There’s a shift in people’s maturity. The boomers have everything they need and realize that having so many things doesn’t bring happiness. Also, they get so much from their children’s pleasure.”

That’s exactly what Mary Drolet had in mind when she wrote the business plan for Club Libby Lu in 1999. The former retail executive, whose résumé includes stints at Montgomery Ward, Carson Pirie Scott and Claire’s Stores, said tweens are the second-largest demographic in the U.S. and will remain so until 2010.

“There aren’t a lot of people playing in the [tween] field,” said Drolet, who envisions a chain of 200 to 300 units. “In the next eight years, demographics will swing heavily toward teens, but there are a lot of players in that market already.”

Club Libby Lu sells apparel and accessories, but that’s not all. Girls can mix their own lotions and potions and get makeovers. It’s an example of the new participatory brand of retailing, which includes Build-A-Bear, where customers stuff and dress their own teddy bears.

La Ciudad de Los Niños (Kid’s City), from Mexico City, takes the dress-up theme and adds a moral spin. Children play at grown-up jobs — such as making and serving pizza in a pizza parlor or selling stamps at the post office — while gleaning vital lessons about responsibility.

The 100,000-square-foot Ciudad de Los Niños is the size of some anchor stores, which has made finding a home difficult. The company had an agreement with Palisades Center in West Nyack, N.Y., but it was contingent on the approval of a town referendum allowing the mall to expand. The referendum failed and now the company is negotiating to open a unit in Southern California.

“It’s the next generation of retail entertainment in that it’s a fully realized example of a completely interactive activity,” said Ray Braun, a consultant working with La Ciudad de Los Niños. “Venues are becoming more participatory.”

Paco Underhill, founder and managing director of Envirosell, a testing agency for stores and banks, expects more foreign merchants to test the American waters. For example, Naartjie, a Cape Town export that opened in Santa Clara, Calif., sells children’s clothing in colorful ethnic fabrics.

“Why Mango isn’t here is a good question,” said Underhill, referring to the trendy Spanish clothing chain. He also cited Mavi, the Turkish denim resource, which is opening its first two stores — one south of Union Square here, and another in Vancouver, in December .

But Underhill wonders whether Three Minute Happiness — not an illicit pleasure parlor but a practical store for time-starved Japanese consumers — would fly in the U.S. The idea behind the store is to shop and pay for merchandise within three minutes.

He’s pretty certain that the noodle shop he saw in Tokyo, where diners eat from individual troughs — another time-saving innovation — wouldn’t travel well, so don’t expect to see it at the local food court any time soon.

“One of the keys for anyone coming to the U.S. is to start in malls,” Underhill stressed. “Urban retailing is increasingly strong, but the major vehicle for selling is still going to be the shopping mall, at least for the next three years.”