Regional marts and industry networks can help pave the rocky road to international buying and selling.International manufacturers and retailers have found the best way to the U.S. market may be through the heartland, rather than the powerful, yet daunting New York nerve center. For international lines, regional markets, with temporary leasing deals and special promotions, offer a lucrative toehold. In terms of marketing to foreign retailers, regional marts pitch themselves as kinder, gentler alternatives to New York, with enhanced hospitality, convenience and access. When it comes to doing business on a global scale, everyone stands to gain. International lines, with their often distinctive styling and high quality, have already been discovered by U.S. buyers weary of the same old domestic product.A new international line, showcased in a regional mart, rather than as a small fish in the big New York pond, is more likely to catch a buyer’s eye. "Most international lines think they must attack through New York," said Marty Fishman, the president of St. Maarten USA, a Dallas-based distributor/marketer with nine European lines and Dallas, Atlanta and California showrooms, serving 1,340 stores. "New York is sophisticated, but money-oriented — not always receptive to something new. It’s better to land troops in Dallas or Atlanta, build relationships and a good formula, then go for New York." For their part, regional marts avidly pursue international retailers, especially as so many U.S. independent specialty stores have gone out of business. And retailers worldwide want direct routes to hot U.S. lines to satisfy brand-hungry consumers.AmericasMart draws dozens of international buyers each market, mostly from the Caribbean, Mexico, South and Central America. Starting this year, AmericasMart expanded buyer recruiting efforts outside the Southeast to include the Caribbean, Central and South America as targets, with bigger marketing budgets for direct mail, telemarketing and store visits.To attract international manufacturers, the regional marts send leasing agents to scout trade shows and new markets, then follow up with direct mail or telemarketing. Marts offer temporary deals, where companies can test markets without committing to permanent space. Currently, 75 to 100 Canadian manufacturers show permanently at AmericasMart. An annual Canadian showcase held during October markets is co-sponsored by AmericasMart and the Québec Trade Council in Atlanta. AmericasMart also is working with the Colombian Chamber of Commerce to host manufacturers in a temporary pavilion at a future market.George Lancaster, managing director, international business development at AmericasMart, designated 150 showrooms in AmericasMart’s adjacent gift mart as "Global Trading Partners." Banners hung in showrooms and free advertising on AmericasMart’s Web site identify GTP showrooms as specialists in international selling. The program, applied to the gift market to date, will extend to apparel showrooms in the next few years. U.S. business people must learn cultural differences and study markets before attempting international business, said Lancaster."The U.S. is weakened by its strength as the world’s largest market," said Lancaster. "We’ve been insular and narrow-minded in the importance of world markets." AmericasMart offers reps written materials and seminars on the nuances of international business. Lancaster said broadening regional sales reps’ commissions to include international accounts would be a further incentive.Other marts have set up similar programs. Focusing primarily on Canada, with its close proximity, the Chicago Apparel Center has brought in over 60 Canadian lines in the past six years. Working with the Canadian Consulate General and the Canadian Apparel Federation, the mart set up a rep locator program to pair Canadian manufacturers with sales reps. Each spring, a Canadian pavilion at StyleMax hosts up to 20 Canadian lines.Ann F. Rosen, business development officer, Canadian Consulate General, said the U.S. market represents a vast opportunity for Canadian apparel makers. And for U.S. retailers, Canadian goods offer a great value, with the exchange rate hovering around $1.65 Canadian to the U.S. dollar, as well as a reputation for quality.Canadian lines are margin-builders for U.S. buyers, according to Judy Pendel, a partner at Pendel Associated Inc., a multiline showroom in Chicago. Two of her four Canadian lines, Montreal-based Splendor and Picadilly, a Toronto knit resource, are regularly marked up in U.S. stores at least three times cost, she said.While the potential for foreign markets is undeniable, pitfalls remain."Canadian manufacturers see the U.S. as a pot of gold," said Pendel, who holds market seminars for Canadian resources. "They look for the big hit, but they need to establish credibility with independent retailers first."One hurdle Canadian manufacturers face is the different buying style of U.S. retailers. With many choices, U.S. buyers may place relatively small orders with a variety of lines, while Canadian retailers buy in depth, but from fewer sources.Canadian collections often span everything from junior to misses groups, which can confuse U.S. retailers, said Pendel. She tells Canadian manufacturers to narrow collections and focus specifically on each U.S. stores’ needs. Fit, fabric and color differences also have to be addressed. Heavy wools may work for cold climates in the U.S., but Sunbelt buyers may not sell even the lightest weight wool. Olsen, a German line with North American headquarters in Toronto, approached U.S. specialty stores with collections adjusted for various regions, adding lightweight fabrics, and more color, or updating styling for more fashion-conscious buyers. Canadians offer summer and winter collections only and fewer deliveries, while U.S. retailers may want constant newness. U.S. retailers expect reliable shipping that isn’t bogged down by logistics. "Successful lines have to adjust. Those who don’t often fail," said Pendel.Canadian retailers, like manufacturers, have to ensure a smooth flow of goods between countries. Canadian buyer Boris Chenkis, the owner of After Five, a Vancouver, B.C. social occasion store, frequents U.S. regional markets for product variety and fashion-forward styling, but shipping problems have caused difficulties. NAFTA requirements eliminate duties on U.S. goods, but paperwork slip-ups, such the wrong compliance or shipping form or incorrect labeling, can foul up the works, resulting in penalties for the Canadian retailer.Chenkis, who shopped both Dallas and California marts in August, said manufacturers and sales reps needed to learn more about NAFTA compliance codes to sell to Canadians. "The biggest problem is paperwork considerations," he said.Since NAFTA’s passage in 1994, The Dallas Market Center has focused on buyers from Mexico. Around 70 percent of international buyers are Mexican; 10 percent Canadian and 5 percent Caribbean. Buyers from 34 countries regularly attend markets, coming from as far as Ghana and New Zealand, said Cindy Morris, chief operating officer of the Market Center Management Company, which manages the Dallas Market Center and CaliforniaMart."We’re broadening targets to get international lines here, either on permanent or temporary basis," said Morris. "It works both ways; we have to get international retailers at the same time."DMC’s International Retail Development office, established over five years ago, has struck collaborative agreements with international tradeshows that will allow for exchange of advertising, space in the shows and database sharing. Market Center Management, which also manages CaliforniaMart, hired a new buyer relations manager this year, along with an international marketing director to grow international business for Los Angeles. The mart draws buyers from 34 countries, mostly Central and South America, and works with foreign delegations and commerce departments to bring in more vendors, but Morris said that efforts, mostly public relations-oriented in the past, will intensify, through more temporary showcases and fashion shows.CaliforniaMart works with the California Fashion Association to bring international business to the state and the mart. The nonprofit CFA has 250 members — around 85 apparel and textile industries, and members in related services, such as freight forwarders, package developers, marketers, lawyers and bankers, all essential to international trade. The group partners with the U.S. Department of Commerce and area chambers of commerce.Working with Designers & Agents, an L.A.-based trade show at the CaliforniaMart, CFA will host a group of 40 Japanese retailers at upcoming November shows. CFA mailed a 20-page marketing piece, with advertising by mart owners, to 3,000 international buyers in Japan, China, Greece, and the Mideast. CFA also recruits international manufacturers and contractors to set up shop in L.A.Ilsa Metchek, the executive director of the CFA, said California’s large manufacturing base combined with its strength in juniors, contemporary and denim, makes it a natural draw for international accounts. Fashion apparel represents the largest manufacturing sector in L.A. and the second largest in California, with an annual wholesale volume of $22.5 billion, according to CFA statistics.Still, setting up business internationally can be tricky. "There are so many issues," she said, noting sizing, currency, freight, customs, and trademarks as a few. "No one person can take care of everything, but we have a network of people that can."Despite hassles, access to international markets is crucial to U.S. manufacturers, said Metchek."With big U.S. retail consolidated to only around 10 major players, selling opportunities are limited," she said. "It may not sound like a big deal, but if every U.S. manufacturer did an additional 10 percent in international business, it would greatly help the U.S.’s world position."Hot Kiss builds its international sales through a network of agents, distributors and licensing deals, along with e-commerce. The six-year-old junior line, with a showroom in the California Market Center, also shows in trade shows such as Las Vegas’ Magic.Hot Kiss’ president and chief executive officer, Moshe Tsabag sells product through L.A.-based licensor the Cherokee Group and also through an independent distributor in Montreal.The company alsodeals directly with independent retailers in Mexico, Japan and a few South American countries. "Our teenage customers are the same all over the world — there’s no difference in demand," said Tsabag.The first crucial step in selling outside the U.S., according to Tsabag, is to register the brand name in various countries to avoid pirating of the brand. Tsabag chooses agents and distributors with expertise in each country’s legal requirements, duties, quotas and taxes. "The average retailer and small manufacturer isn’t sophisticated enough in import/export to set everything up," he said. "It’s a headache, but when you get to the right people, it’s worth it." International sales now account for only 3 percent of $50 million annual sales, but Tsabag projects an increase to $70 million in 2003, in large part due to burgeoning international sales.U.S. importers with European lines also face challenges. Marty Fishman of St. Maarten USA, spends four months a year in Europe, negotiating with governments and manufacturers to bring bridge and designer lines to the U.S. Only well-established companies with sales of at least $15 million are considered, to insure good production and shipping, said Fishman.Europeans, who tend to approach fashion more as an art than a form of commerce, also must adjust to the U.S. sales-driven mentality. "Europeans have a passion for fashion, and for life — but in the U.S., it’s a 24/7 business mode," said Fishman.Passion for fashion is also a driving force for Latin American retailers, but cultural differences can hinder trade. Mercedes Gonzalez, the director of Global Purchasing Group, a New York-based consulting firm, has retail clients in 15 countries in South and Central America and the Caribbean.Gonzalez helps retailers preview markets all over the country for requested and new resources. She negotiates price, handles shipping, packing, export documents and bill-paying, charging an 8 to 10 percent commission."Latin American buyers shopping New York often have a hard time, as U.S. manufacturers don’t understand how to handle them," she said. "Vendors are put off by the complications, even though the [accounts] are often big, viable department stores." Seasonal needs are reversed in South America, further complicating buying. Stores, lacking a line of credit, often try to pay cash for goods, only to be rejected by vendors. Gonzalez’ biggest challenge, though, comes from large New York manufacturers, who may be reluctant to do small cuts, especially for new Latin American accounts. Global Purchasing will expand an office in CaliforniaMart, where Gonzalez shops for trendy contemporary lines, such as Rampage and Hot Kiss, that Latin American buyers love. She also brings retailers to AmericasMart, and will host a buyer seminar there during yet-to-be determined markets. This year, the four-year-old Global Purchasing projects sales of almost $5 million in wholesale orders from clients. Perhaps surprisingly, Latin American buyers want the same hot trends as the U.S., according to Gonzalez. "Young girls in countries who wouldn’t be caught dead a few years ago in anything like native peasant looks are now wild for them," she said.

To continue reading this article...

To Read the Full Article

Tap into our Global Network

Of Industry Leaders and Designers

load comments
blog comments powered by Disqus