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A battle is brewing at marts across the country: regional sales rep groups versus the behemoth regional marts.
This story first appeared in the December 18, 2002 issue of WWD. Subscribe Today.
The relationship between regional marts and sales representatives’ groups is often adversarial, and conflicts over landlord-tenant issues can escalate to the point of a bitter separation.
Take the situation in Atlanta, for example, where AmericasMart is taking over management of the “temporaries” show, formerly run by Southeastern Travelers Exhibitors (STE). The sales organization is in turmoil over what to do, where to show, and even whether it can continue to exist.
The STE show, with around 100 of STE’s 400 members in temporary space on AmericasMart’s second floor, has been a fixture at the apparel mart for more than 20 years. AmericasMart didn’t renew STE’s contract, thereby assuming management of the show.
Now called “New Temporaries,” the mart-run show has expanded and renovated space and added new product categories. The mart will expand the show to three floors within three years. (See related story, page 20.) STE members are not excluded from the show, and mart officials estimate 85 percent of former STE temporary exhibitors will participate in the show, slated for Jan. 30-Feb. 3.
“We’ve made a business decision to grow the show, and we needed to assume responsibility for it. Hopefully, we can put on a show that will provide sales representatives with more buyers, especially from outside the Southeast,” said Lawton Hall, executive vice president of new business development at AmericasMart. He added that 240 booths are leased for January, up from 125 at previous STE shows.
STE members are deeply torn over the issue. With no majority consensus, some favor staying with the mart, with the promise of more buyers and business. Others want to maintain control of the mart show, and don’t want the rate to increase: a 10-by-10-foot booth, formerly around $850 for an STE show, is now $1,100 at the new show. Feeling squeezed out, these members insist that after January, STE will sever ties with the mart, setting up a separate show at a new venue.
In South Florida, after 20 years of shows at the Miami International Merchandise Mart, Southern Apparel Exhibitors, a Miami-based sales group, left the mart four years ago to produce their shows at Fort Lauderdale’s Broward County Convention Center. Among other conflicts, SAE resented a growing immediate delivery business at the mart. Now SAE is returning to the mart, after negotiation and concessions by the mart on the immediate delivery issue. (See related story, page 16.)
In Chicago, Apparel Center Tenants/Chicago, in the Chicago Apparel Center since 1977, came close to defecting when the mart launched StyleMax, a twice-yearly temporary show, in October 2000. To participate, apparel tenants had to move from temporary or showroom space in the apparel mart to the StyleMax exhibition area in the adjacent Merchandise Mart. ACT took issue with the new show, but participated in the end.
“[ACT members] grumbled and grumbled, but in the end StyleMax brought in more retailers, which everybody wants,” said Paulette McGuire, ACT/Chicago’s executive director. “There will always be landlord-tenant problems. But we can’t take the show elsewhere. It’s very hard to put on a trade show.”
According to the Bureau of Wholesale Sales Representatives, an Atlanta-based national organization with 5,000 members and around 15 to 20 affiliates, including STE, sales representatives’ “clubs” began in the Thirties. Groups of traveling salesmen held shows, usually in hotels, networking and enjoying a fraternal comraderie. After World War II, organizations began to hold self-directed shows in major cities.
During the Sixties and Seventies, with the advent of regional marts, sales groups developed partnerships to show in permanent and temporary mart space. Conflicts between these powerful real estate interests and sales rep tenants were inevitable, but manageable, as long as business boomed through the mid-Eighties. In the good old days, with hundreds of retailers, there was plenty of business to go around.
But in the past decade, economic turmoil and big retail consolidation took a toll. Attrition of specialty stores, especially of mom-and-pop businesses, the backbone of business for both marts and sales representatives, changed everything.
“As everybody has struggled, conflicts have come to a head,” said Michael Wolyn, executive director of the BWSR. “Tenants blame landlords and vice versa, but nobody is lily white in this. The real problem is the overcapacity of product — too many shows and too few people — so everybody’s chasing nickels and dimes.” BWSR, which lobbies congress in Washington for small business concerns, provides access to health insurance, legal council and other benefits. Affiliates are often chapters of BWSR, providing access to such services.
STE members who favor leaving the mart say the STE constitution bylaws require them to produce and provide a show venue for members.
“Unless we vote to change the bylaws, we have to take the show elsewhere,” said Lou Pizi, president of STE and multiline lingerie sales firm Apparels’ Intimate. “But people are concerned on whether STE can drive traffic to a new area.”
Other members are much more blunt about the prospect of two shows in Atlanta. “It would be disastrous and total self-destruction for STE to move,” said Frank Neff, principal of Neff Brothers Inc., a Charlotte, N.C.-based multiline sales rep with a permanent showroom in AmericasMart. “Marts get a lot of undeserved criticism, but STE would be better served to work with them.” As a former longtime member of both STE and BWSR, Neff has not renewed membership this year, feeling that fraternal organizations are less necessary today.
While Neff and others see sales organizations as antiquated, others, particularly a fledgling group of New York sales organizations, see vast potential in organizing.
Susan Bonomo, principal of Bonomo & Co., a New York-based multiline showroom, helped found Showrooms New York, a sales organization of more than 50 New York showrooms. Organized in 2001, the group is developing marketing programs and events for buyers, and is in discussions with the BWSR and the local government for advice and support.
“As New York shows like Fashion Coterie and Intermezzo have grown, showroom business has lessened,” she said. “After Sept. 11, 2001, business dropped off and we needed to go out to regional markets. The shows have been fantastic, but we need to get more showroom business in between shows.”
Providing incentives for buyers and a safe haven for members is the primary goal of Los Angeles Fashion Exhibitors by PCT, formerly Pacific Coast Travelers. Margaret Cox, principal of Margaret Cox & Assoc., a multiline sportswear sales firm, is a member of LAF by PCT and BWSR. With a permanent 1,200-square-foot showroom for 25 years, she also is on the CaliforniaMart board of directors.
She uses LAF services, such as listing in a separate directory mailed to 2,600 buyers, as well as participating in LAF-sponsored fashion shows, buyer excursions and parties. She also uses BWSR benefits, such as health care and legal counsel. Though she feels that sales organizations are less relevant than they once were, she sees membership as a safeguard for an uncertain future.
“If my lines didn’t need a showroom, I’d need to be a member in good standing, to participate in temporary shows,” she said.
Henry Dietz, president of LAF by PCT and of San Francisco-based Dietz Associates, a multiline sales firm, is a true “road warrior,” and a believer in sales groups. Having had permanent showrooms in the now-defunct San Francisco mart during the Eighties, he now prefers traveling and participates in 25 shows a year. He’s a member of approximately half a dozen sales organizations in his Western territories and in Hawaii.
While he admitted there are too many shows, he thinks sales people shouldn’t put all their eggs in one basket, or be beholden to one mart.
“I hate to see salespeople lose their place to show, as in the case with STE,” he said. “But the marts are struggling, too. Both sides need to find common ground so both can benefit. If they don’t, the loser is often the independent sales rep.”