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Looking to give members insight and advice on dealing with the economic crisis, the Underfashion Club staged a seminar that stressed tightening inventories and operational costs and the need to provide innovative, value-driven product.
More than 150 industry executives attended the event, “Rising to the Occasion: Keeping Your Brand on Top in a Down Market,” on Sept. 25 at the W New York — The Court in Manhattan.
The general consensus was that intimate apparel, which traditionally is a resilient category in tough times, is taking a hit. A discussion moderated by Tom Garson, president and chief executive officer of Lovable World Trading Co., concluded that, along with focused management, ground-breaking product is necessary to entice retailers and consumers to buy.
“I’ve been in business for 21 years, and clearly it’s the worst I’ve ever seen,” said Seth Morris, president of the Carole Hochman Design Group. “All of these things are happening at the same time — the credit crunch, the housing problem, unemployment, the problems on Wall Street. We used to say cautiously optimistic. Now, we just say cautious. We are going to have to give…a very compelling reason to buy. The first thing is not to scrimp on anything. It’s about newness and design, and at the end of the day, it has to be about the product.”
Martha Olson, president of Calvin Klein Underwear and core brands at Warnaco Group Inc., said, “I think everybody in the world knows it’s bad out there. Retail is very challenging and we’ll see it for a while. Intimate apparel is suffering at the same level as stores. Inventories are being planned tighter. A lot may have to do with [pedestrian] traffic and a lot of consumers are thinking about what is being bought and sold. If your product sells, it’s something that excites the consumer. I think retailers are seeing the same message. They’re being very open and honest about it, and as a result they’re being cautious.”
Richard Murray, president of Wacoal America Inc., said, “Department store business [overall] is down 5 percent. In August it was 6 percent. This is the first time I can recall that intimate apparel business has been as affected as the stores have. Whether it’s Kohl’s or discount chains, intimate apparel departments are suffering like everyone else. We have to be conservative because retailers absolutely are. We are trying to maintain our marketing monies, as well as back-office [expenses] to justify opening positions. But there are 20 questions we ask before we fill them and we postpone any major projects unless there’s a big return.”
The speakers were also asked what their companies are doing to capitalize on multichannel opportunities and how they compete with private label.
“We have a very diverse portfolio of brands and a significant private label business,” Morris said. “The multichannel concept is very significant to us and we can go from top to bottom. As far as competition, it’s our customers, where about 70 percent of business is private label. We need to have great brands they can’t knock off. We need to bring a compelling design and brand equation day-in and day-out with brands that resonate, and you don’t want to lose sight of that.”
Olson said, “From a channel perspective, it’s to grow the business where the consumer is with our portfolio of brands on the Internet.”
Murray said, “We’re putting emphasis on specialty stores [boutiques]. It’s been a big push for over a year. It’s a natural because they’re experts on product knowledge and service, and we’re working with our retail partners on Internet business. But product development is the key thing. We like to look at it as the whole product and bring it to the table. We have all of our Wacoal consultants out there. They help with [store] events and are interactive with product development. We bring a whole package to retailers and that’s some advantage over private label.”
Another key question was what companies are doing strategically to insure a balanced supply chain.
“Our sourcing strategy is to build strong partnerships,” Morris said. “It’s been the core of what we’ve done. What we take very seriously is social compliance. We are not looking to find ourselves on ‘60 Minutes.’ We source 100 percent overseas and we are continually trying to diversify. China is a monster today and we’re trying not to put all of our eggs in one basket.”
Murray said, “Our Wacoal brand bra is made…in the Dominican Republic, China, Thailand and South Korea. Social compliance also is very important for us. We’re not going to be the biggest customer they have, but we do reference checks and credit checks. We try to deal with the most reliable contractors.”
Asked about keeping brands on top in a down market, Morris said, “It’s about price. There’s pressure from retailers down to us and our suppliers. You need to be close and understand what the consumer wants right now.”
Olson said, “Our geo-diversity is helpful and we can spread the risk and focus on product and execution. And if we are smart, we can capture that clenched fist the consumer has around her purse.”
Murray added, “The first thing is we have to survive. You have to understand the philosophies of your company, but at the same time still be flexible.”