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Tough Forecast for August Market

Manufacturers are tightening their seat belts for a bumpy ride at next week?s spring market here.

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NEW YORK — Manufacturers are tightening their seat belts for a bumpy ride at next week’s spring market here.

This story first appeared in the July 28, 2008 issue of WWD.  Subscribe Today.

August is typically not among the biggest seasonal markets, taking a backseat to the February and November venues. But the nation’s credit crunch and dismal retail environment have transformed the upcoming market into a pivotal moment for retailers and vendors. Following the cautious mood of merchants in May and lackluster second-quarter results at stores, orders for spring are expected to be reevaluated, edited and, in some cases, dropped. Retailers want to keep inventories tight and narrow, with a focus on key items that will tempt consumers, as well as replenishable goods, especially top-performing brands that convey a certain cachet and higher quality.

“I think the response from retailers will be similar to the May market: cautious,” said Seth Morris, president of the Carole Hochman Design Group. “I don’t think the economy has changed since May and maybe it’s even scarier. Retailers will probably be more cautious. But certainly retailers will continue to look for newness and innovation.”

Josie Natori, chief executive officer of Natori Co., said, “This is a time that separates the boys from the men. Clearly, this [economic slump] has to go on, and certainly all of us in the industry are cognizant of the negative climate and mood. But there will be a Mother’s Day and other gift-giving holidays to spur business. I hope we’ve done our homework with items that will drive the business in this climate. In times like this we’re sharper on product and price, and we are constantly in a dialogue with retailers on a daily basis, so we don’t expect any surprises.”

Despite the gloomy forecast, Greg Holland, president of the licensed Donna Karan and DKNY sleepwear brands at the Komar Co., said he believes it will be a time to take advantage of opportunities.

“I definitely think it’s a time for opportunities for branded products, for products that are exciting and innovative,” Holland said. “And I think retailers will be looking hard at assortments of brands that are meaningful. I also think the economy will continue to be challenging and retailers will come to market with reservations for spring 2009. With that said, I think the customer is responding to great product. If your product stands out on the selling floor, the consumer is still buying. But she’s not buying the second choice, she’s buying the first choice, a quality brand.”

Zack Salino, president of D2 Brands, the U.S. division of Delta Galil, said vendors will need to be far more creative to garner orders for spring.

“I expect the climate at this market to be even more cautious than previous markets during hard times,” Salino said. “It’s more challenging and more real with the harsh reality of the economy. In May, the question was, ‘Are we in a recession, will we be in a recession?’ Now, it’s more upon us, more of a reality. But it’s during difficult times like this that people need to get more creative, and maintain and grow business.”

Guido Campello, vice president of marketing and innovation at Cosabella,, said, “Stronger brands will show their strength, and we want to show retailers that we are not stopping with innovation and we’re not scared. The challenge right now is spreading the optimism we have to the retailers. Companies like ours that work on a worldwide basis can weather this storm.”

Bob Vitali, executive vice president of sales and marketing at Wacoal America, said the company has changed its strategy of showing the spring collection in May.

“We’re being aggressive,” Vitali said. “We used to show the bulk of newness in the first quarter, but now we’ve spread it to 60 percent in the first quarter and 40 percent in the second quarter. We did this because women want something new whenever they come into stores to shop. We’re spreading product over the course of the season and giving the consumer a reason to buy. I also think you have to be in stock. Tried-and-true styles during tough times become more important, but on the other side of the coin, the consumer also wants to see freshness.”

Gale Epstein, president and creative director of Hanky Panky, said, “An instant gratification purchase like a lipstick has always been said to be recession-proof. We have a similar thing with our thongs in new, bright, happy colors like coral, yellow-orange and azure blue.” �

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