Engaging the Customer

Interest and innovation help coat makers weather the economy.

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WWD MAGIC issue 08/25/2008

Interest and innovation help coat makers weather the economy.

This story first appeared in the August 25, 2008 issue of WWD.  Subscribe Today.

With world currencies still in flux and soaring prices of raw materials and fuel, vendors in the outerwear sector say that it is increasingly difficult to be optimistic about the business climate. But they say the only real antidotes to flat sales and stagnant growth are innovation, cost control and giving consumers even more value for their money.

“Our business with the U.S. has been very difficult,” said Virginia Lato, owner and founder of Yes Virginia, a coat maker in Toronto. “Because we’re in Canada, we feel as if there’s a little less pressure on us than if we were in the U.S. But still, we’re trying to hang tough.”

Lato said that now more than ever, the pressure is on vendors to come up with new and innovative styles that encourage consumers to part with their hard-earned cash.

“There is always a market for things that are interesting,” she said. “I think now is the time to maybe take a bit of a leap. People won’t buy more of the same. Now, what they want is to be enticed. They want something that interests them, has some life in it.” She is showing bright colors in fake furs and fun silhouettes, at the $250-and-up wholesale price point. Lato said she draws inspiration from a historical perspective; in bad economic times, she said, people go for the offbeat — like miniskirts.

“People want more fun from their fashion when things are tough, and that’s what we have to give them,” she said. “This is the time when a lot of companies who are faint of heart may not want to stay around for this. We have to be smart about it, and realize that the pressure is on us.”

Also affecting things is the fact that a growing number of retail buyers are now waiting until well into the season to start placing orders, as opposed to buying far in advance as they might have done in the past. Vendors said that they have a better chance of surviving the climate if they have plentiful inventory — so that a store can call up at the last moment if demand warrants it, and have something shipped over quickly.

“It’s up to us to make sure we have inventory to provide at this time,” said Sue Marshall, a manager at Adler Collection in Sylmar, Calif. “We’re keeping more inventory than we have in the past, which has really been the trend over the past couple of years.”

Marshall and vendors at other companies say that pricing is paramount. To that end, Adler has segued away from high-end luxurious leather wash skins and is using less expensive fabrications like canvas, fake fur and microfiber, offering them with leather blends.

“It brings your costs down from having a full luxurious leather jacket to having a better price with a mix of leathers and textiles together,” she said, adding that the average wholesale price point on the line was around $70. “It doesn’t really deviate from what we’ve been doing, and adds a different kind of look.” Upcoming items include parkas with fake fur hoodies and

micro­fibers in exotic leopard and zebra prints. But despite the wealth of offerings, Marshall predicted that orders “will not be in the quantities as we’ve had in the past,” and that the brand is sticking largely to what sells. Also driving the business — opening up new channels, which recently have come to include leather furniture and home theater products.

“We have had to branch out and take risks,” she said of the thriving furniture line.

Henry Sun, owner of Winter International in New Jersey, said that adding to the problems relating to high manufacturing and shipping costs was the matter of climate change.

“I worry about not having enough cold weather,” he said. He produces a 100 percent fur line, wholesaling from $100 to $3,000. “I hope this year will turn out OK, but customers are very price-conscious. Everything is about price.” With most of his manufacturing done in China, Sun said he also is dealing with soaring freight prices.

Brands also said that not having a minimum order requirement helps. Dawn Johnson, operations manager at 3BWest in Denver, said that business is up about 20 percent over last year, largely because prices are accessible ($73 at wholesale) in the company’s line of leather biker jackets. “We’re a small company, only about five years old, and we don’t have a lot of the same rules as the other brands,” she said, adding that personalized service and the freedom that comes with being able to supply just a few pieces has helped get the word out.

Indeed, most vendors are anticipating smaller orders overall.

“Things are not easy,” said Chang Oh, president of Pelliarts in Toronto, a maker of fur coats, capes and accessories that wholesale from $10 to $400. “We still have steady orders compared with last year, but our price points have to be good, and I’ve noticed that orders are smaller and fewer customers are placing them. Price has become the big factor. People don’t want to spend on a high-priced product range, so we’re focusing on our smaller accessories.”

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