Men’s wear was a winner over the holiday season — outperforming women’s apparel at retail for that all-important time period — and the momentum has continued into early spring.
The luxury end of the market has been the leader, with shoppers responding to high-end tailored clothing and dressy sportswear.
Although current events in Japan and the Middle East have caused some slowdowns in the past weeks, merchants remain upbeat about the remainder of the year as they believe customers are more confident about their finances and are turning out to fulfill pent-up demand following seasons of restraint.
However, price hikes in raw materials, which range from cotton and wool to cashmere, coupled with labor cost increases in China, are expected to lead to further price inflation this year — and executives are split on the impact those increases will have on consumer spending.
Prices are expected to rise 10 percent or so by fall and even more for next spring. Some high-end retailers are not predicting strong consumer pushback but others point to the delicate nature of the economic recovery and the persistent high unemployment rate as indicators that many shoppers may balk at higher prices.
Also central to fashion marketers’ strategies this year is the ever-expanding influence of the Internet, e-commerce platforms and social media, with companies continually fine-tuning their approaches to these rapidly evolving technologies.
That’s the overall outlook heading into next week’s WWD Men’s Wear CEO Summit, which will be held on Tuesday at the Mandarin Oriental Hotel in New York City. The one-day gathering will bring together top retail and vendor executives to address the key challenges and opportunities impacting the industry. Keynote speakers will include Emanuel Chirico, chairman and chief executive officer of Phillips-Van Heusen Corp.; Robert Hanson, president of the global Levi’s brand; Natalie Massenet, founder and executive chairman of Net-a-porter; Victor Luis, president of Coach International Retail; and Doug Williams, ceo of HMX Group.
“Business is actually quite good,” said Tom Ott, senior vice president and general merchandise manager of men’s wear for Saks Fifth Avenue, who will participate in a retail roundtable at the summit. “It’s very broad-based and goes from opening to the top price point. And the super-luxury business is really healthy.” He pointed to luxury sportswear, made-to-measure clothing and dress shoes as among the top performers.
Ott said that although there’s no doubt prices will be going up due to higher raw material costs, he expects the impact to be less at his level. “As you go up in price, it’s less impactful,” he said. “A cashmere sweater from Cucinelli is mostly labor and marketing, the cashmere is the least of it. But at Wal-Mart, when a T-shirt goes from $7 to $11, that’s where you’ll see the impact.”
Anthony Sapienza, ceo of JA Apparel Corp., was more cautious about the resilience of consumer spending in the face of price increases.“I don’t think the consumer is ready for price increases. There’s still relatively high unemployment. I think we’ll all have to tighten our belts to absorb some of those increases. We’ve had a nice gradual increase in sales as we’ve come out of the recession and we don’t want to end that,” he noted.
JA Apparel’s business is up 10 percent for spring and in fall orders at Nordstrom, said Sapienza, which he attributed to a return to dressing up in the workplace. “Young men are wearing suits and jackets,” said Sapienza.
Ari Hoffman, ceo of Gant USA, will participate in a roundtable discussion on brand collaborations. “The category that really needs to be talked about is dot-com stores,” he emphasized of the year ahead. “Every department store that buys from you has a dot-com site and how do you deal with that? There has also been a proliferation of Web-only stores, from Mr. Porter to Gilt to Bonobos. They are coming out of the woodwork. How do you deal with your own e-commerce strategy in relation to those sites?”
That’s a question that will become more important to Gant when it launches its first U.S. e-commerce business at gant.com next month. The site will join existing Gant online shops in Sweden and the U.K. and will become the platform model for a rollout of e-commerce sites in Gant’s other international markets.
“It’s a similar issue to balancing business between your own stores versus other stores,” said Hoffman. “I see these other sites as brand builders. If someone wants to shop Gant specifically as a full collection they will come to gant.com. But other shoppers may not specifically look for Gant and will come across it at a site they already like.”
Lou Amendola, chief merchandising officer for Brooks Bros., will also participate in the branding roundtable. He noted business in January and February continued to be strong after a solid holiday season, but March has been a little tough. “We just see a cautiousness out there again,” he said. “Across the board, there may be a little dip in consumer confidence.”
Although Brooks Brothers has seen an average price uptick of around 10 percent, customers have not complained, added Amendola. “There’s a lot more talk about gasoline prices than cotton prices,” he pointed out. “Our shirts went from $80 to $88 and that’s not too bad. If it had been $100, then it would be a different story.”
Lacoste, where cotton products make up 85 percent of the business, did not raise prices this spring and for fall has boosted prices by about 6 percent on average. The company did not raise the price of its classic $79.50 L1212 polo.
“We buy raw materials well in advance and we decided to absorb most of the price increases and take lower margins,” said Steve Birkhold, ceo of Devanlay USA, which holds the Lacoste apparel and accessories licenses. “We probably won’t be able to hold off on increases forever, but we wanted to wait to see what the longer-term trend on raw materials prices is.”
Same-store sales have jumped in the double digits at Lacoste stores in the U.S. year-to-date. Birkhold attributed the improvements to a wider, more fashionable merchandise assortment as the company brought in more of the brand’s international collections to stores here.
Bob Mitchell, co-president of the Mitchells Family of Stores, will also participate in the retail roundtable at the summit and he’s optimistic about the year. “We’re seeing consistent double-digit increases in men’s,” he said, noting that the pickup has been most evident in the luxury end of the business with brands such a Zegna, Brioni, Cucinelli and Canali.
Customers who hadn’t visited the stores in a while have returned, he said, because they feel better about the economy and their financial portfolios. In addition, they’re embracing the new slimmer fits in men’s wear so “they’re reinvesting, especially in tailored clothing. And the custom business is strong again.”
Although Mitchell too has seen a bit of a drop-off in sales this month, he believes it is a temporary pause. “This is not the time to be overly aggressive, but the right product and assortment are getting results,” he said.
Alberta Ferretti's "Rainbow Week" sweaters are back. The designer closed her #MFW show with a few day-of-the-week sweaters, which first debuted on the catwalk last January as part of the pre-fall 2017 collection. #wwdfashion (📷: @delphineachard)