Junior accessories vendors are reining in prices to keep customers coming back for more.
This story first appeared in the August 26, 2002 issue of WWD. Subscribe Today.
It hasn’t hurt the junior accessories business one bit to have the likes of Britney Spears and Alicia Keys sporting hats, chunky belts and sunglasses in all manner of fashion spreads and public appearances. But the category’s strength also owes to its ability to offer fast-turning trends at low price points.
“After Sept. 11, the junior business was affected initially, but I think that ran its course, and now things are good if not better than they have been,” said Matthew Smith, product development manager at Matscot International, the 10-year-old accessories firm based in Owings Mills, Md.
In fact, many said that dips in the economy have only served to widen their customer base; they’ve picked up penny-pinching parents who would rather not pay for age-appropriate accessories.
That said, as with any retail category, junior accessories face their share of challenges, and many said that the increasingly busy junior category is putting pressure on vendors to keep the trends coming, while keeping price points competitive in order to compete with mass chains like Target and Wal-Mart.
The dominance of these chains also means that junior accessories labels are seeing business with independent specialty stores diminish.
“We are finding that as we put our stuff into new stores, old store are going out of business,” said Mark Biales, president of Wild Berry Incense, the 31-year-old Oxford, Ohio-based firm. “There are fewer smaller independent stores, and mass chains are competing against them.”
Here, a roundup of vendors in the junior accessories category and how they are faring.
l The global economic slowdown did not slow the business pace at Preco Manufacturing Inc., the 10-year-old accessories firm with headquarters in Liverpool, N.Y.
As a result of strong sales, the company recently doubled its sales staff and is looking to spread its distribution of mostly resort or tourist-oriented stores to larger specialty chains.
“That will give us a more well-rounded business, rather than just being a seasonal company,” said Kathleen Salm, sales administrator. “The junior business is very good. We are in a time when parents want to please children, and they give them the spending money.”
The company focuses on jewelry from finger and toe rings to ankle bracelets, rhinestone body patches, watches and glow-in-the-dark necklaces. “If you don’t keep up with what is popular with teens, you lose the market share,” she noted. “But it’s a challenge to keep your finger on the pulse. You have to keep an ear open and listen to what teens have to say.”
Salm said that eye-popping fixtures continue to be an important element in today’s busy retail environment, and Preco offers glittery castle-shaped displays for its jewelry assortment. The company is currently putting final touches on the new fixtures, but Salm declined to disclose additional details. “Display is very important,” she said. “You have to grab the kids’ attention as soon as they walk into the store.”
l Business continues to thrive at Twinsies, the three-year-old accessories firm based in Beverly Hills, Calif.
“With accessories, people don’t have to think too hard about spending money for their children,” said Heidi Moss, co-owner. “Kids are trying to develop their own image, so they always want to be trendy and with the times, whereas older people may keep things for a few years.”
That said, Moss noted that being able to offer lower opening-price points continues to be the category’s top challenge, because the competition posed by mass chains such as Target and Wal-Mart and outlets like Woodbury Commons, a large discount mall in upstate New York, has gotten stiffer.
“You have to keep your prices low, but yet you have to offer innovative and quality product to be competitive in this market, when the economy is hurting,” she said. “Price is key and makes people choose to buy something or not. And the quality has to be here.”
In addition, Moss noted that juniors move from one trend to the next very quickly, so the category needs manufacturers who can quickly turn merchandise around.
To stimulate business, Twinsies is starting a clothing division, while continuing to step up its assortment of toe rings and crystal beaded jewelry. “We want to be able to maximize the market place, and we really want to grow,” she said. “Everyone’s goal is to create a must-have item. It’s a challenge, but we’re up for it.”
l The popularity of jewelry is currently driving sales at New York-based Almar Sales Co., which makes costume beaded jewelry.
“Even though the hair [accessories] sector has slowed down, the jewelry industry is keeping us ahead of the game,” said Elliott Simhon, manager of the junior division at the 37-year-old firm. “The junior business has been great for us due to the overwhelming success in jewelry.”
Simhon said it was difficult to predict how business would be over the next six months, but he said that several factors will come into play, including the state of the economy and lower price points.
“The challenge is going to be the ability to give customers more than they ever wanted at the most reasonable prices,” he noted. “Our production manager knows what’s new and hot, and he tries to keep our prices down while still getting the best material to use. We stress good quality.”
The company sells to department stores, junior specialty stores, mass market chains and discount stores.
l Judy Wood, vice president at 18-year-old Ann’s Trading Co., which is based in Los Angeles with a showroom in New York, said that colorful, printed east-west handbags with stones and sequins continue to register strong sales and solid reorders, while the home and gift categories have declined in recent months.
“The handbag business is firmly in place,” Wood noted. “It will continue to grow. Handbags are a necessity that you can justify buying.”
Wood said that she expects sales increases of up to 15 percent this fall, but is counting on the season to break in later than usual.
“The fourth quarter will be very strong, but [people will buy] close to need,” she noted. “Last year, it didn’t break until the last week of November, and this year, I don’t think it will be until the first week of December. People are buying closer to need because they are living paycheck to paycheck.”
Wood noted that price points will be a challenge.
“Our gross margins are tightening up,” she said. “These kids are smart, they are shopping for price. Kids go into malls and comparison-shop.”
To stimulate business, Wood said the company is offering custom-tailored lines for specialty chains.
“Gone are the days when you can sell the same thing to every junior chain,” Wood said. “They face each other in every mall, so each store must have jewelry with its own identity.”
l At eyewear firm Pan Oceanic Eyewear, executives are optimistic about business for the next two quarters. “Spring 2002 was a tough season, and most of it came out flat at best,” said Dolores Wexler, account executive for the 38-year-old, New York-based firm.
“However, the junior customer continues to be fast moving, fickle and in need of constant excitement,” she said. “We try to offer enough different styles that the junior chains can bring in new product every four to six weeks to satisfy the lust for newness.”
The company recently licensed the Playboy brand name for a line of sunglasses, which Wexler expects will help business. Wexler said the junior category needs to identify and interpret trends quickly and offer immediate deliveries to maximize on an emerging trend.
“With junior chains, there is always room for late-developing trends,” said Wexler. “Most of the market is not keeping inventory, especially in junior accessories because it is such a rapidly changing market. We have to be able to watch the trends develop and then ship immediately.” The company works on an eight-week delivery cycle.