Retailers and vendors believe they will have to continue to contend with a number of issues critical to remaining viable, competitive and trend-right in the second half of 2009.
This story first appeared in the July 6, 2009 issue of WWD. Subscribe Today.
They expect to have to deal with a continued harsh economy, sluggish store traffic and price-conscious consumers who want a compelling reason to buy. Executives from the manufacturing, marketing, financial and retail fields were asked what they consider to be the single biggest challenge as they tackle third- and fourth-quarter business. Here’s what they said:
Bob Nolan, president of Jockey International North America wholesale and licensing operations: “The biggest challenge is the economy, getting unemployment down and making people feel comfortable about their economic future. When that happens, they will be back in the stores and will start spending vigorously again.”
Dan Sackrowitz, vice president of marketing at barenecessities.com: “The biggest issue is finding ways to remain relevant and compelling to an economy-conscious consumer, while remaining true to your brands’ core identity. Companies need to get customers to stick by their brand, without resorting to tactics that will erode the trust and positioning that they’ve spent so many years building.”
Josie Natori, chief executive officer of Natori Co.: Believes creativity will be the formula for success for retailers and consumers.
“I think the most important challenge is product newness and/or innovation that will bring back the consumer.”
Allan Ellinger, senior managing partner at Marketing Management Group: Said tight credit paired with poor consumer confidence will continue to be a huge issue. “In today’s environment, lenders are trying to eliminate or minimize over-advances [advances that exceed collateral value]. The reason banks tend to be very cautious is because companies in the apparel industry are undercapitalized and retain too little earnings. I think some vendors have been dramatically impacted and some have managed accordingly.”
Ellinger said one of the biggest challenges is to get consumers to regain confidence. “Apparel sales are down 25 to 30 percent across the industry. There has to be a dramatic improvement in consumer confidence. [Retailers and vendors] have to think more realistically about the fashion calender. They need to reprogram the calender closer to season with merchandise being sold closer to season, not two or three months in advance and then put it on sale in season. That’s insanity.”
Arnold Aronson, managing director of retail strategies at Kurt Salmon Associates: “It’s really a mix of defending your franchise by being conservative in intelligent administration of all of your overhead costs, as well as maintaining an offensive state of mind about increasing the top line that’s consistent with the strategic mission of your brand. The great ceo’s of companies will have to be very nimble and quick to balance these two areas of business. They have to be peripheral, not take too many risks, but it must be intelligent risk taking.”