NEW YORK — When a team goes into a slump, the coach will often hammer home one lesson to his players in the locker room: Focus on the basics.

That’s pretty much the same approach that jeans vendors are taking as they head into 2004.

After several hot years, the jeans market cooled considerably in 2003, with sales softening for many vendors. In a mad effort to keep the momentum of a buying frenzy that had been sparked by the introduction of low-rise jeans at the dawn of the new century, designers focused on developing ever-more-extreme washes and finishes, subjecting jeans to barrages of chemicals and abuse.

This year, reality caught up with the market, as consumers peeked into their closets and realized just how many jeans were crammed in there — 8.2 pairs for the average American woman 16 or older this year, according to data from Cotton Incorporated’s Lifestyle Monitor. That prompted a slowdown in spending on jeans.

Still, jeans executives take heart from the fact that since their product first hit the U.S. market about 150 years ago, jeans have never really gone out of style. Even in a year that most executives described as an off one, survey data suggested that overall sales continued to grow. Polling by STS Market Research of Cambridge, Mass., found that for the 12-month period ended in September, women aged 13 and up spent $5.6 billion on jeans, a 5.7 percent increase from the year-earlier period. That followed a 3.7 percent decline in calendar year 2002.

Denim suppliers have taken stock and refocused their lines on more basic, five-pocket styles in more traditional and vintage-inspired washes. Executives said they’re confident that 2004 will prove to be an up year for the denim business, even if the modest growth rates they’re expecting don’t compare with the explosive activity seen in 2000 and 2001.

As Ersin Akarlilar, chief executive officer of the Turkish jeans brand Mavi, said: “A lot of the news has been focused on the finish, that the finish has to be better. And what that means is it has to be more colorful, more extreme, just more, and eventually it gets to be too much.”According to executives, the reaction to the trend toward fashion overkill has been a pickup in consumer interest in classic denim styles.

“What’s encouraging is that basics seem to be selling very well,” said Gordon Harton, president of Merriam, Kan.-based Lee Co., a division of VF Corp. “They are among the better performing products we have in the marketplace.”

Michael Silver, president of Silver Jeans, which is produced by Winnipeg, Manitoba-based Western Glove Works, suggested, “The consumer is looking for jeans that look really good, that will last, that they like and that won’t be outdated that quickly.”

Dick Gilbert, president of New York-based Mudd Inc., which also produces the Paper, Denim & Cloth and Zena lines, said, “If you could eliminate everything out of the post-back-to-school period that wasn’t basic, you probably had a hell of a post-back-to-school, because the basic stuff was up double digits.”

Some executives argued that the slowdown in demand for denim wasn’t just a reaction to fashion missteps. They pointed out that the overall rocky economy over the past year took a toll on apparel purchasing.

“All in all, the apparel business is soft. Jeans are not as bad as the rest of the business,” said Assad Jebara, president of Zana-Di Jeans and U.S. Design Group, a New York-based company that also produces the Request, Pepe Jeans and Paco Jeans labels. “The unemployment rate is the highest it’s been in eight years. [Consumers] are spending less and saving more, and paying down their debts, maybe getting ready for a rainy day. It’s just the cycle.”

Jebara’s company is preparing to launch a new junior line early next year, though he declined to disclose details.

Jeans executives are putting their hopes on cleaned-up, classic jeans styles driving the business next year. They said that should make for a more predictable market, since basic items are less likely than out-there fashion styles to wind up on the markdown rack. But they acknowledged that a focus on basics isn’t likely to bring about the sort of strong growth that comes from a major fashion breakthrough.They divided into two camps on that issue.

“If you can predict what the next big thing is going to be, then you will be a happy camper,” said Jebara. “There’s no single brand out there that seems to know.”

He said his company had stepped up its offering of athletic-inspired looks, largely in nondenim fabrics, in an effort to drive sales.

Silver said he thought that jeans makers were better off not trying to chase the grail of a next-big-thing.

“Five months ago, the new thing was secondary fabrics, and it didn’t pan out quite as well as was expected. There’s been a bit of a process over the past few years where us pundits picked a trend and killed it before it was able to grow,” he said. “They filled the stores with product that the consumer wasn’t quite ready for and turned it into markdown stories.”

He said now his sales representatives are doing most of their business in five or six key fits of jeans, compared with about 25 styles that dominated his business years ago.

“We’re selling a lot less quantities of styles and a lot more volume in those styles,” he said. “For that, I’m happy.”

Jeans executives tend to get nervous when they’re talking up basic products, and most interviewed took pains to emphasize that just because basic jeans seem to be driving the business, that doesn’t mean they think that anything in blue denim with two legs and a fly will sell.

“What’s driving it is the basic styling, but fabrics and finishing and fit are still playing a key role,” said Lee’s Harton. “It’s not just the stonewashed five-pocket jeans.”

Executives also said that it seemed that most major retailers have come into the holiday selling season with lean jeans inventories. That, they suggested, means that if sales pick up as expected in 2004, jeans makers will quickly be moving into replenishment mode.

“Retailers really were very cautious going into fall. They had a lot of inventory left over from spring,” said Andrew Pollard, director of sales and marketing at the New York-based U.S. arm of Sixty Inc., which produces lines including Miss Sixty. “A lot underbought for fall. What I’m feeling now with our key customers is that they’re seeing a turnaround in the market. There’s a lot of optimism in the air.”Sixty Inc., a unit of the Italian firm Sixty SpA, is in the process of doubling its U.S. workforce, which will stand at 45 by early next year, Pollard said.

One of the perpetual questions in the jeans market in recent years has been exactly when Levi Strauss & Co. is going to pull out of its sales plunge, which is expected to hit its seventh consecutive year this year. As reported, the company this week brought on turnaround firm Alvarez & Marsal to help it cut expenses and seek ways to build revenues.

The company said that its chief financial officer, Bill Chiasson, had left the company at the end of a year in which Levi’s faced an accounting-related lawsuit and also discovered that it needed to restate earnings for 2001 and the third quarter of 2003 because of some tax-related errors. Observers have said that they expect to see a further shakeup after A&M executive Jim Fogarty moves into the cfo’s office at Levi’s San Francisco headquarters.

Andrew Jassin, a principal in the New York consultancy Jassin-O’Rourke Group, said he believes that over the long term Levi’s will also have to diversify its business model to remain successful, by acquiring other brands.

“They need to create more product opportunities,” Jassin said. “I don’t think they can sell more under any of their brands. I think Dockers is a well-established brand. I think part of the strategy now is to become a company that is a brand management firm. That is where they’ve been mismanaged. We know of many opportunities over the years that were brought to them and they couldn’t pull the trigger.”

Jeans executives across the industry are also facing the reality of high cotton prices, which last month were still running at about 46.6 percent above last year’s levels, according to Department of Agriculture data. If the fiber’s price remains at its current high level, executives said, that will likely result in a margin pinch for jeans vendors.

“It has turned, absolutely, into a rise in international denim prices,” said Silver. “It’s very difficult timing, because when you go to the basics you can’t hide behind all the [additional production costs of] fashion. There’s going to be less money in it for the denim makers and the denim mills because, to be honest, I don’t think the retailers are going to be in a mood to increase the price of the product.”Harton noted that some of the effects of the rising fiber prices are being offset by a production capacity glut.

Even within the trend-driven junior segment, executives said the fashion pendulum is swinging back toward basics. According to Robert Regina, vice president of Younique, the trend for spring denim is vintage washes in cuffed capris, with short skirts also a key part of the mix. His company also plans to keep offering nondenim jeans.

“The customers have pulled back a bit,” he said. “But that’s after five years of increases in sales. Now it has just leveled off.”

He described the rising interest in basics as being a regular part of the fashion cycle.

“People are hungry for new,” he said. “The trends change from one thing to the next. Last year it was bohemian, now it’s the Mod look. Next it will be the basics.”

At DKNY Jeans, the vintage denim trend is still on an upswing, and according to Susan Davidson, president of DKNY Jeans, the business in five-pocket jeans is rising above the more fashion-driven pieces.

“The whole vintage look is taking on a more significant role in the denim category,” Davidson said. “Jeans have a slightly heavier weight with a more traditional look. Stretch is still important, but it has to resemble a rigid look. It needs to look natural, more like the old vintage denim.”

Dollhouse will use the first six months of the new year to increase business in international markets, said company president Albert Shehebar. With stores already in place in South Korea and sales in Canada on the rise, Shehebar said he is on the prowl for a licensee to distribute the brand throughout South America.

“We have been very successful internationally, so far,” he said. “I hope to grow that business even further.”

For spring, the company is offering an Eighties-inspired collection of skinny-leg jeans with bright color tops to work with the denim. He said he is working on a new ad campaign to support the new collection and plans to place ads in magazines as well as on billboards in urban areas.“We are definitely increasing our ad budget for next year,” he said. “We are also advertising in new ways such as sponsoring concerts and other events connected with the music industry. You have to advertise these days or they forget about you.”

Alden Halpern, president of the Los Angeles-based Tyte, said next year his company will be rolling out a collection of new washes and hand-sanded jeans, styles borrowed from the high-end denim market.

He said first-quarter bookings are running 60 percent over last year’s level. Because of the surge in business, Halpern plans to launch a full ad campaign to include consumer teen magazines.

Beginning in January, Halpern said he will sign licenses for junior knits, activewear and children’s wear. That will be his first foray into licensing.

TRENDCAST

The swing of the fashion pendulum back toward basics doesn’t mean that jeans makers will be laying off their design staffs and cutting back their assortments to one style.

While executives agreed that the time had passed for many of the fashion excesses of recent seasons — including styles with lots of extra stitching and pockets and overdone washes — there will still be key details to make jeans look fresh. Among next year’s highlights:

  • A shift back toward straighter legs from flared styles.

  • More natural-looking and vintage washes, with some hand-sanded details, but not so much heavy whiskering.

  • Fit remains key for the category and brands looking to develop repeat customers need readily under standable and consistent fits.

  • Belted looks are expected to remain key for junior shoppers, who are always interested in a freebie.

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