Finding the Formula

Today’s consumers are sparing with their dollars, so outerwear makers are trying to jazz up their offerings without inflating the price tags.

Bernard Holtzman, president of Harvé Benard, said, “Essentially what’s happened is that retailers are very skittish and they’re waiting to see how business is and which items are driving sales. That’s compelling them to wait and wait and wait, until they finally strike. Sometimes once they strike, the assault is too late.”

Holtzman noted apparel prices have declined by 3 percent for the year and said it’s become “a sign of honor” for well-heeled women to shop in discounters and mass marketers.

“Women aren’t spending more,” he said. “They’re buying more for less.”

While price is key, there are other important second-half strategies, including building brand portfolios with licensed lines and spicing up pieces with more sportswear items.

Holtzman cited Harvé Benard’s textured silk short jackets, waterproof cotton raincoats with toggles and affordable worsted wool coats as examples of how the brand tries to differentiate itself. Most of its outerwear wholesales for $40 to $59.

Some large companies are working to diversify their brand portfolios. Executives at The Levy Group and Herman Kay Bromley said they plan to wrap up designer outerwear label deals within the next few months.

“I’m a firm believer that brands are a great asset to a business. But you need to have the right product with the right brand,” said Barry Kay, co-president of Herman Kay Bromley. “If you don’t have the right product, it doesn’t work.”

Others like London Fog Industries are taking a more streamlined approach. Last month, London Fog divided itself into three independently managed businesses: Pacific Trail, London Fog Trade and London Fog Factory Outlet Stores. The new format is designed to further growth through a vertical operational structure, particularly for the Pacific Trail division. At this point, London Fog will still source production in factories in Asia and there are no plans to license its brands to other companies, said Todd Gilmer, marketing and communications manager.As part of that restructuring, London Fog trimmed its workforce by 7 percent, and additional cuts may follow. LFI eliminated 36 posts from its Seattle corporate headquarters, reducing the number of staff there to 122.

For Pacific Trail, the focus will be on “providing a lot of value to retailers and consumers,” Gilmer said. “We’re definitely seeing price deflation in the market, but we’re well positioned to take advantage of our pricing.”

There is also a push to be in a greater variety of stores instead of just department stores, which tend to be the base for most outerwear companies. Pacific Trail is now available in department stores, sporting goods stores and outdoor specialty stores.

Fredric Stollmack, president and chief executive officer of Weatherproof Garments, said, “People are motivated by value more so than they used to be.”

Despite that, Stollmack described the current retail landscape as “tremendous” in stores that vary in price range from Bergdorf Goodman to Costco. By combining fashion and value, Costco has attracted a new crop of customers, Stollmack said. Those customers are also savvy enough to wait for second and third rounds of markdowns, and to use coupons that further discounts.

Given that, Weatherproof plans to listen carefully to buyers during August market to see how their prices measure up to their competitors’ prices.

“They’ll tell us if we’re right on or not and that will drive our prices,” Stollmack said. “We certainly want to be competitive, but not the lowest guy on the block.”

This year, the brand’s women’s sales are expected to double to $18 million, due partially to its determination to keep wholesale prices between $40 and $80. Weatherproof’s margins “have suffered a little bit,” because prices are similar to last year’s, Stollmack said.

Searle plans to expand the square footage in its 62nd Street and Third Avenue store in Manhattan and is scouting spaces to open another store here possibly by the end of the year, said founder Steve Blatt. With seven stores in Manhattan, Searle will focus on new fabrics like novelty tweeds and colorful coats for fall, said Blatt. Fitted silhouettes with set-in sleeves, fancy details and fur also are expected to be important.Look for a delayed start to fall sales, said David Lazar, director of retail at Searle. The firm will introduce fall outerwear in mid-to-late August, a few weeks later than normal. “There was such a late start to summer, that will push everything back a touch,” Lazar said.

Deborah Gaertner, vice president of G-III Apparel Group’s women’s division, noted economists expect “more robust spending” in the second-half of this year.

For the three months ended April 30, G-III trimmed its loss to $2.6 million from last year’s $4.2 million. Sales for the period grew 47.4 percent to $18.7 million.

Early indications of fall sales, which just shipped to stores, show consumers are responding to fashion. “Fashion at a price is key,” Gaertner said.

G-III launched Black Rivet, a 90-piece collection of cloth and leather coats. Shorter jackets, especially bomber jackets and corduroy styles in fitted looks are popular, Gaertner said.

Donald Levy, president and ceo of The Levy Group, seconded that notion, saying outerwear’s sportswear slant has injected some energy into the character.

The Levy Group produces licensed Liz Claiborne, Dana Buchman and Esprit coats, its house brands, Braetan and Donnybrook outerwear, as well as Wildlife sportswear and licensed Bonjour jeans.

“That’s good because when wool is strong, outerwear is strong,” Levy said.

Retail sales “may benefit from a turnaround this fall,” due partially to the absence of terrorist attacks in the U.S. and low interest rates, he said.

The Levy Group is negotiating for a designer label, Levy said. “For department stores — after private label — that’s their reason to be,” he said.

Herman Kay plans to line up a designer label in the next couple of months, Barry Kay said. The company makes Anne Klein New York, AK by Anne Klein, London Fog wool outerwear and Albert Nipon coats, as well as its own Bromley and Herman Kay outerwear.

Joining the Field

Shoppers have a few new outerwear labels from which to choose this fall, among them Piero Guidi, Barbour and Dosty.Next month, Piero Guidi’s outerwear will begin being sold exclusively at select Saks Fifth Avenue units. Known for its technical fabrics, the 30-piece collection includes aprés ski polyester-filled nylon jackets, twill cotton safari jackets and coated cotton styles. Wholesale prices will range from $187 to $395. Based in Urbino, Italy, the brand is sold in 1,000 stores worldwide.

As part of the 40-year-old brand’s “make it your own” pitch, shoppers are encouraged to have the nameplates on their outerwear monogrammed with their initials, names or home cities. Instead of shipping the garment back to the customer, it is sent back to the store where it was purchased. That boosts store traffic and provides the opportunity for another potential sale, said Asha Parcells, partner in the Aeros showroom, which represents Piero Guidi in the U.S. To drum up more interest in the label, in-store events are being planned for September.

The British brand J. Barbour & Sons aims to broaden its image beyond its waxed cotton jackets, a favorite with outdoorsmen. This spring, the company introduced women’s outerwear and sportswear in the U.S. and aims to build on that success this fall.

In addition to its waxed cotton coats, Barbour is offering waterproof breathable jackets, quilted jackets and riding jackets. Retail prices range from $140 to $400 and Barbour outerwear is sold at Orvis, Mitchell’s and other specialty stores. Founded in 1894, Barbour employs 400 people worldwide and owns three factories.

Dorothy Shuford Lanier, designer and owner of Dosty, a brand that specializes in legwarmers, believes in finishing touches.

Her brand’s outerwear debuts in specialty stores this fall. A minicoat, biker jacket, cargo duster coat and velvet zip-front jackets are among the offerings in the 13-piece collection. To be competitive, Lanier priced her coats from $72 for a canvas jacket with racing stripes on the sleeves to $238 for a velvet Cossack coat.

“Retailers are so terrified because the economy is so soft,” Lanier said. “I wanted to offer something that would seem like a reasonable buy.”

Prophet Showroom represents Dosty, which still includes sweatshirts, sporty jackets, rugby-striped over-the-knee socks and coordinating scarves and leggings. First-year projected wholesale volume is about $250,000.The Real Deal

Reality series are in, so why not reality advertising? Three outerwear makers are confident that approachable-looking people will help bolster fall sales.

Pacific Trail recruited three families and photographed them in outdoor adventures for the brand’s fall ad campaign, which breaks in the September issue of Backpacker magazine. The company also is working with The Bon Marche to finance billboards and commercials in cinemas in the Seattle area, said Todd Gilmer, marketing and communications manager for Pacific Trail.

“One of the things we are trying to accomplish is to make the brand relevant,” Gilmer said. “We wanted to depict real families in real-life adventures to create a believable image and an attachment to the brand. We want to send a message that Pacific Trail is for everyday, average people and not just for models.”

Its parent company, London Fog, is also brushing off its image. London Fog’s new “Global Style” ad campaign, shot in cities including London and Paris, is intended to keep consumers from viewing the brand as staid. Updating the collection and its image has helped the brand to open more doors in existing department store accounts.

Weatherproof Garment Co. is in talks with “Sex and the City” star Kristin Davis to star in its fall ad campaign. Her wholesome image appeals to the brand, said Fredric Stollmack, president and chief executive officer.

“She represents what we think women want to look like and that’s a more classic, sensible look,” he said. “The idea of trying to sell high glamour and sex in advertising is passé.”

Stollmack said fashion and advertising are taking more cues from the Forties and Fifties, when life was seemingly simpler and more dependable. With or without Davis, Weatherproof’s fall ad campaign will run in magazines and on billboards in New York, Los Angeles and San Francisco.

Getting Technical

With sportswear and athletic brands eating into more of their market share, outerwear makers are introducing more technical-oriented jackets with the hopes of attracting new customers to their brands.

Stuart Pollack, president and chief executive officer of Bernardo Fashions, said, “The entire industry is moving to fabrics that do something to offer higher performance or lower care-cost.”His company has introduced a machine-washable, stretch suede that lends itself to more fitted styles, especially sportswear. Bernardo “washables,” which can also be placed in dryers, are designed to save consumers the expense of dry cleaning.

“Consumers love suede, but traditionally they’ve also thought of it as an expensive, luxury item that is hard to care for and easy to ruin,” Pollack said.

In addition to his company’s washable suede, Pollack pointed to other carefree, stain-resistant and recycled fabrics as having an impact on the market.

“These fabrics and concepts will make it further into outerwear,” Pollack said. “This will change dramatically the fabrics used [by manufacturers] and the way the consumer sees them.”

Free Country, a $35 million operation, has trademarked its MicroTech fabric, a knit-backed fabric with a polyurethane coating developed four years ago. Reversible hooded jackets, everyday trenchcoats and anoraks are among the 20 styles for women. Items have such special features as underarm grommets for ventilation, kangaroo pouch pockets and mesh linings.

Consumers are responding to MicroTech’s soft, sanded hand and to its value — jackets retail for $100, said Ira Schwartz, president and chief executive officer. Beyond generating more business, MicroTech will “build a proprietary brand” for Free Country, he said.

“We want to make solid brand extensions,” Schwartz said. “We want people to know we’re not trying to be another outerwear company that’s throwing the same ideas out year after year.”

Outlast Technologies has made inroads with outerwear makers like Obermeyer, Scott and The North Face. Outlast earned “certified space technology” status for its phase-change fiber, fabric and foam technology from the Space Foundation, a nonprofit group that helps advance space endeavors.

Since it introduced phase-change technology 12 years ago for astronauts’ gloves to protect them against extreme temperature changes, Outlast has worked to fine-tune it. Now 200 brands in 60 countries use the technology, said Brad Poorman, vice president of North America.

W.L. Gore & Associates has stepped up its technological features. The company is pushing Airvantage, an adjustable insulation system for outerwear that allows wearers to inflate their jackets or vests by blowing a few short breaths into a hidden valve. When they overheat, they unplug the valve to deflate the garment. On average, the technology adds about $90 to a garment’s retail price.Marmot, Oakley, Columbia, Rossignol and Rainforest are some of the usual suspects offering the technology, but less athletic-oriented labels like London Fog, Lands’ End, Hugo Boss and Swiss Army have discussed using the product.

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