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In addition to hitting Las Vegas? retail and hotel businesses, the ongoing U.S. economic slump is expected to impact Sin City?s trade shows.

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WWD Project Preview issue 08/21/2008

In addition to hitting Las Vegas’ retail and hotel businesses, the ongoing U.S. economic slump is expected to impact Sin City’s trade shows.

With gas and food prices continuing to rise, home values still falling, consumer credit woes persisting and retail sales plummeting nationwide, Las Vegas’ apparel trade shows this month could be feeling the economic pinch in the form of lower than usual buyer attendance and decreased order volume. As stores scale back inventory and take a cautious approach to buying, trade shows, including Project, are bound to see some impact.

While show parent Advanstar Communications Inc. hasn’t released attendance projections, retail industry analysts said traffic is more than likely to be down this year.

More than 60 percent of the show’s attendees are from specialty stores, smaller boutiques or operations that tend to be hit harder by the economic downturn than larger chains. Even chain retailers have struggled of late, with a number of bankruptcies — Steve & Barry’s, Mervyn’s and Boscov’s among the most recent — in the past 12 months. Still, Project should command a large turnout. According to organizers, the show continues to see growth in the women’s sector, drawing thousands of buyers each August among some 25,000 visitors to the three-day event, which will run Aug. 26 to 28 at the Sands Expo and Convention Center.

Erin Armendinger, managing director of the Jay H. Baker Retailing Initiative at the University of Pennsylvania’s Wharton School, said that the big national shows this year have drawn noticeably fewer retailers than in the past, something that’s a clear result of the depressed economy. Last month, vacancies at U.S. neighborhood and community shopping centers rose to a 13-year high, while vacancies at larger, regional malls were at their highest level since 2002, according to research firm Reis Inc.

“Retailers are doing things online or buying locally, we’re just not seeing them go to as many shows, in large part because of the cost,” Armendinger said. “If you are paying for hotels, flight, gas and registration it gets to be very costly, especially for smaller or struggling businesses these days. Times are not good in stores, and for retail in general.”

Some store owners echoed the sentiment, saying that instead of going to Project or MAGIC this summer, they were staying closer to home.

“We’re not doing the Vegas shows, just doing the Dallas market this time around; we’ve been able to find a lot more vendors nearby in the last year or so that have new and different things, and we don’t have to travel so far to do the buying,” said Denise Manoy, owner of the Indigo 1745 boutique in Dallas. “We are not a real trend-driven shop anyway, so we’re looking for unique pieces you might not find at shows like that.”

According to 2007 data from Advanstar, more than 85 percent of Project Las Vegas attendees are from the U.S., with more than half coming from the West Coast and about a third coming from the East Coast. Forty percent of the buyers attending shopped for men’s wear, with 46 percent buying women’s wear and another 12 percent buying kids’ wear.

Those who attend said they will be on the hunt for new brands and items that set them apart from other retailers in the marketplace.

Fred Levine, who owns the Southern California chain M. Frederic, said he and his wife would do virtually all of the stores’ buying at Project this month, calling the show a “godsend” because he can shop for men’s, women’s and kids’ wear all in one place.

“Your merchandise has to be outstanding, has to be exhilarating. Times are so, so hard now that you have to have irresistibles, your buying has to be sharper than ever before, so you have to work for it at the big shows and not go in with a preconceived notion of what you’ll find,” Levine said. “You need to have great things in the store for people to lay out those dollars.”

Value is another big driver for the retailers planning to attend the show late this month, especially in women’s apparel.

“Wholesale, if I can find things under a hundred bucks I’m so happy; that’s my goal,” said Heather Martin, the manager and buyer for actress Lisa Rinna’s Belle Gray boutique in Los Angeles. “Retail-wise, anything under $200 tends to sell really well here. These days people are willing to spend money on a great pair of shoes and boots but want to spend less on clothing items.”

Mandy Krewson has owned her Scottsdale, Ariz., boutique Mandy’s for seven years and said she typically sees a 5 to 10 percent increase in sales year-over-year. This year, she said she’ll be happy just to keep sales flat, and will be buying at Project more cautiously than usual, keeping an eye on her inventory levels. “Shoppers are definitely more budget-conscious, people are spending less. There are so many stores around here that love to carry collections, which are very nice, but we like separates, mainly, something that works for us in the current economy,” Krewson said. “Project is a great place to pick those up — shorts, a fun dress or a top. A lot of great new lines have launched and you can get a great value without having to spend $200.”

Categories that are likely to be popular, retailers predicted, are long dresses, cashmeres and midprice accessories.

For example, Tie-ups, an Italian line of brightly colored, recycled rubber belts, will make its North American debut at Project this month, something Canada-based distributor Throat Threads is hoping will gain traction with the retailers who come to buy.

“Accessories will do well at the shows, it’s a category that people will spend on because these are smaller items with a big impact, like jewelry, bags and belts,” said Jay H. Baker’s Armendinger. “You can change what you already have with a small number of items. Change your belt, for instance, and you’ve got on a whole new outfit. That’s the kind of market this is and that’s how people will buy.”

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