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Moderate Makers Race the Clock

Sportswear firms are focused on the time it takes to go from design concept to retail floor and how to shrink it.

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NEW YORK — Time is the new dimension in fashion.

While the spotlight shines on the designer runways this week, mainstream sportswear companies are keenly focused on a different type of calendar — the time it takes from design concept to retail selling floor and how to shrink it.

Make no mistake: This is not the fast-fashion syndrome of knocking off runway looks at lightning speed like Zara and H&M. This time warping is being driven by closer-to-season consumer buying patterns and the need to be more in touch with what consumers want in the increasingly competitive retail world.

Speed-to-market has become a key issue for everyone from major firms such as Jones Apparel Group, Kellwood Co. and Liz Claiborne Inc. to medium-sized companies like Harvé Benard, Ballinger Gold, Ninety and August Silk, as well as retailers producing their own private labels.

Vendors are cutting lead times by shifting sourcing strategies, improving their forecasting and planning and, in some cases, taking greater risks to be able to meet consumer and retailer demands.

“The speed-to-market issue is critically important now,” said Peter Boneparth, president and chief executive officer of Jones, noting that the company’s junior brand LEI is the fastest of its brands with capability of a 30-day turnaround out of Mexico, while collection lines, like Jones New York and Nine West, tend to be slower with a six month lead time.

For the year ended Dec. 31, net profits at Jones advanced 34.8 percent to $318.5 million on sales of $4.34 billon.

“The closer to need you can deliver the product the more chance you have to be on-trend. One of the paradoxes is there’s a perception that the bigger you are as a company, the slower you are. But the bigger companies have the capability to be the fastest because of the infrastructure we’ve made offshore and all the way down the supply chain.

“The reality today is that we’ve made speed one of our major initiatives. If you’re in business today, speed is a big barrier to entry. It’s competitive.”

Stephen Ruzow, president of women’s wear at the $2.3 billion Kellwood, whose biggest brand Sag Harbor has been estimated to have annual sales between $500 million and $600 million, said the move to be faster is definitely being driven by stores buying closer to need.

This story first appeared in the February 12, 2003 issue of WWD.  Subscribe Today.

“[Buyers] want to hold back and commit as late as possible. And I think they’re right. They’re totally right because business is very tough and they don’t want to be committed six months out,” Ruzow said, adding that retailers want to order about one to two months later than they’ve done historically. “They want to be four months out. The trendier the lines, the closer the lead times. But Sag Harbor buyers are starting fall now.”

The company has slashed one month out of Sag Harbor’s production time to about five months, he noted.

“It’s not great, but it’s a step in the right direction,” Ruzow said. “When you’re six months out, you’re going to miss trends. The only people who will be right on are those that can turn in eight to 10 weeks like ABS or Briggs [the moderate pants company acquired by Kellwood last week]. For big companies like Sag Harbor, where we’re making 45 million orders a year, it’s a lot harder to take a month out of the production process. Whereas, with a junior brand like My Michelle, where we do a lot of domestic production, it’s easier.”

From a retailer’s perspective, Frank Doroff, Bloomingdale’s executive vice president of ready-to-wear, said the days of predicting consumer behavior and writing orders seven months ahead of time are over.

“It’s a different way of running the business. It’s difficult. It’s hard to be right,” Doroff said. “It’s always good, though, to have forward merchandise on the floor. We’re trying to improve the receipt flow and not become so front loaded. Because a lot of times you’ll bring in 65 percent of receipts in the third quarter and 35 percent in the fourth quarter, and when the business breaks down 50-50 in sales, the front-load receipt is not good for anybody. [The bottom line is] consumers are waiting to buy because they think they will be able to buy on sale.”

The focus on being speedier is ultimately being driven by the consumer, who’s immersed with a wealth of information designed to cater to developing her personal style while fitting her budget, said Bernard Holtzman, president of Harvé Benard.

Adding to this scenario is a consumer that’s getting younger in mentality, even if she’s 35- to 55-years old, and will wear something trendier like satin cargo pants for day, Holtzman said.

“Fashion is turning quickly and stores don’t want to plan out. What they want to do is test something in a small way and check the trends,” he said. “What’s so compelling is you have these magazines like In Style and Lucky and suddenly women are reading it as a bible. And if the bible says a trend is coming, that means everyone better be on board with this item very quickly, otherwise sit with antiquated goods.

“They’re not getting their information looking at a $5,000 coat in Vogue. Women aren’t buying wardrobes, they’re buying items, whether it’s satin cargo pants or blouson jackets.”

Since retailers are holding out on their orders, Holtzman said he’s cut his production time from nine months to six months. In addition, he reserves about 30 percent of his business to react quickly to suddenly emerging trends, turning the product in about four to five weeks.

“You have to predict a trend quickly, and yes, the trend usually comes from sources like the Guccis of the world or vintage,” he said. “But you have to get it into work quickly and then produce. And most larger stores have developed their own private label so we almost have to make things they haven’t even thought of yet.”

Meanwhile, at better-to-bridge company Ballinger Gold, president Thomas Burns said retailers coming in now are not interested in fall, they’re interested in what’s going on now.

“They’re not buying. They’ll take whatever basics they feel they have to have, but when it comes to fashion pieces, they’re waiting and delaying those purchases,” he said, whose company sells to Nordstrom, Bloomingdale’s, Saks Fifth Avenue and Neiman Marcus. “Actually, the longer we can wait and truly validate what the trends will be, the better off we are. If we can hold out, then turn on a faster time, the better.

“There’s just so much uncertainty today that people are delaying decisions, but when they’re ready to buy you have to be able to produce and deliver the product when they want it. This also places more pressure on the manufacturers because we have to stick our neck out.”

Liz Claiborne Inc. also has had success by quickening its production calendar. Through its Liz Quick program, it has shortened the cycle time from design to sales floor to 14 weeks for certain fashion products. Paul Charron, chairman and ceo, has credited the program for helping Claiborne achieve strong earnings in a down market for apparel. For the nine months ended Sept. 28, income was up 15 percent to $173.2 million, or $1.62 a diluted share, from $150.6 million, or $1.43, last year. Sales increased 6.3 percent to $2.72 billion from $2.56 billion.

Jamie Gorman, vice president of sales at Ninety, a moderate brand that caters to the young misses’ customer, said her team can produce in three to five weeks because it has 10 factories in Brooklyn. However, its typical production cycle is just two months. Gorman said by always sending new merchandise to stores, it helps in another way: to maintain a healthy margin.

“It sounds kind of cliché, but my people are really looking for newness — and that’s true,” Gorman said, whose business also does about 25 percent private label. “So, if something is hot and happening, I cut and ship in 10 days.”

She noted that some importers are shifting production from Asia to Mexico or the Caribbean to cur lead times.

If being faster falls under the new umbrella of thinking between retailers and manufacturers, August Silk president Lou Breuning said he also thinks another aspect of this involves changing the thinking about what should be in stores and when. For example: extend the summer season with new doses of merchandise rather than feature heavy fall goods when no one is ready for fall — not even the weather, Breuning said.

“We have to be more proactive to the seasonal calendar. The consumer is responding closer to season more than ever,” he said. “I don’t want to start shipping fall colors in May and June, which is traditionally what we do in transition, but why not expand the season into more applicable styling and summer fabrics that the customer is more likely to wear now? Retailers are starting to listen. All of us are readjusting our thinking.”

Andrew Jassin, managing director of Jassin O’Rourke Group, a management and marketing consulting firm, said he thinks a shift in thinking is already taking place as companies address their logistics issues and examine ways to improve speed to market.

“Fashion has two purposes,” Jassin said. “One, it’s what you want to show in the windows, the presentation of the future. But it’s really what’s current, what people want, and the danger is if things are in the stores too long, people don’t want to react to it. It won’t sell at full price. I’m not sure people are knocking off designers, but they’re knocking off retail. Sales are proven and they’re looking at what’s selling in Asia, Europe and what’s selling at Ann Taylor, rather than the runway.”

The issue might just be one of the last frontiers that has not yet been thoroughly tackled by apparel businesses, said Emanuel Weintraub, a consultant based in Fort Lee, N.J., who is chairing a seminar under the topic “Collapsing the Design and Product Development Cycle” April 8 at the Princeton Club in Manhattan.

“People have worked on logistics, distribution, emulating the retail model — well now, what is it that we’ve left untouched? It’s how do we stay in touch with our consumer,” Weintraub said. “In some cases, when fall 2003 hits the market, [designers] are working on fall 2004. Well, we say that’s wrong. We are being driven by what the consumer wants and apparel should be like a water faucet you want to turn on, but don’t want to turn off.”

Companies that are successful at accelerating the design process from creativity through production will have a competitive edge, Weintraub said. For most companies, it takes about nine to 13 months to complete the cycle — from idea to reality, and Weintraub said that is just too long. He suggested companies shoot for a five- to six-month cycle time.

“They will be able to come to market closer to when buyers want to buy and be more in tune to the partnership between the retailer and the vendor supplier,” he said. “Whether it’s apparel or autos, the consumer says, ‘Be in touch with my needs’ and ‘I want it fast.’ The calendars are just too long.”

“Everyone is talking about speed,” Weintraub added. “How do you get me through the checkout lane faster? Cash my check faster? By reducing the cycle time, it’s also going to satisfy the needs of the buying departments.”

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