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Can the sluggish economy have a silver lining?
This story first appeared in the August 25, 2008 issue of WWD. Subscribe Today.
Some smart women’s sportswear companies think so, seeing the downturn as an opportunity to reevaluate business practices and get a little creative.
Kathryn Peters, owner and design director for two women’s sportswear lines, Putumayo and Whitewash, said the tough times triggered her to craft a new concept: selling boutiques a white armoire stocked with its vintage-inspired Whitewash fashions, which wholesale from $38 to $88.
“I thought, what can we do to give the retailer a break?” Peters said, noting that she decided to create a full retail or shop-within-a-shop concept. Selling the armoire along with the clothes allows retailers of all sizes to re-create the look Whitewash articulates in its booth at WWDMAGIC and in its Whitewash corner of its Putumayo retail store in Charleston, S.C.
“I don’t know if I would have had the idea if the economy stayed the way it was,” said Peters, who added that there is a waiting list for the armoire, which is available in January. “I was inspired to do a better job and become more innovative.
“There’s no fear here because it’s opportunity,” she continued. “I’m sleeping four hours a night, but I’ve never been more excited. There’s never been a better time for someone who has an innovative product to partner with their retail stores.”
With that in mind, Peters also opted against scaling back its square footage at WWDMAGIC, a common response in a difficult economy. Instead, she registered for more — a lot more.
“We feel so strongly about MAGIC that we jumped in with both feet,” said Peters, who decided to buy the equivalent of five booths, up from her usual two booths. “People who jump in and embrace the challenge don’t feel the negative impact because we’re able to show our entire collection to our key customer. With one booth, we could get lost. We wanted the most prominent space we could find.”
Peters likes to create a similarly strong retail environment for Putumayo, playing and selling Putumayo World Music CDs in its WWDMAGIC space. The company also plans in January to offer DVDs detailing the story behind the music and clothing line, which for spring consists of an organic cotton group featuring a green rain forest print on knee-length and long dresses, cargo pants and camis, along with a Bermuda floral selection, a bright madras plaid group and other varieties. Items wholesale from $29 for a T-shirt to $96 for a silk trenchcoat.
“We travel around the world and that’s where I get my inspiration,” she said. “The whole trend now is toward global, so what we’re doing is right on track. If anything, our business has gone up.
“It’s about color and the feel of the garment,” Peters continued. “The first thing people are drawn to is color and the next thing they do is touch it.”
So Peters strives to find a “fantastic print in the right color with the right fabric.
“That’s not easy to do,” she said. “What sets us apart is we’re focusing on cultures around the globe. Our basics tend to slow down now, and our more novelty items are what people are attracted to.”
Avi Rachmani, owner of Biacci, a maker of jackets, tops, bottoms and dresses, said he counters the tough economy by keeping his overhead low and the price of his apparel equally in check.
“One of the key things is to make sure your prices do not go up,” said Rachmani, noting that the company does not operate an expansive showroom or hire unnecessary personnel.
He also struck a deal with his fabric suppliers in which the product quality is increasing without a sharp hike in prices. “It seems like everyone along the line understands that we’re in the same boat,” Rachmani said. “That’s very important. The people who want to stay in business work with you.
“We have [fabric] suppliers who have gone above and beyond,” he continued. “Because so many people are going out of business, they’re doing a fantastic job and trying to gain more of the marketplace. People are working harder and it shows.”
In particular, he cites a silk-feel polyester and a linen blend that barely wrinkles. And whereas other fabric prices went up substantially, Rachmani said his company’s prices increased only 10 to 15 percent while receiving better-quality fabric.
For Biacci, wholesale prices range from $22 for a shirt up to $78 for dresses. “We keep it tight, we work hard and the consumer sees it,” Rachmani said.
At WWDMAGIC, Biacci will show immediates, holiday and almost its full line of spring and summer merchandise, which will include fun prints, neutrals and dusty pastels appearing on more classic silhouettes.
“We never chase the supertrends,” said Biacci designer Andrea Kozy. “There’s nothing outrageous. It’s very wearable. In this economy, I don’t believe in being too trendy.”
Isabel Sokiryansky, chief economic officer and designer of Isabel and Bella Pelle, said sales of her Garland, Tex.-based lines have increased 15 to 20 percent from last year because she believes buyers are searching for newness and novelty.
“We give them something different,” said Sokiryansky, who cited Nordstrom as one of her top accounts. “It has to be different, otherwise it’s boring.
She produces halter-look tops with grommets and ruching; crinkle lambskin jackets in turquoise, orange, yellow, lime green and purple; jersey tunic dresses and long dresses incorporating tie-dye and geometrical prints; bright, colorful reversible patchwork skirts; city shorts, and capris in stretch cotton sateen and different washes of denim. Wholesale prices average from around $59 for jeans up to $229 for leather jackets.
Neil Dombrowsky, partner at Toronto-based Picadilly Fashions and its newer division Svetlana Fashions, said the economy has hit its retail partners hard.
“It’s the worst I’ve ever seen it in terms of stores closing,” he said, although he noted that, at the same time, new boutiques are opening.
As a result, Picadilly cut back its IT department, choosing to outsource some of its work, and has tightened its advertising budget. “You just have to run a tight ship. It’s been a tough season, but we’re getting through it,” he said.
Whereas a consumer used to buy a full outfit consisting of a jacket, top and pants, now that shopper might only buy a two-piece outfit or items, Dombrowsky said.
Picadilly, which specializes in more mainstream casual looks, is responding with more fashionable, more modern pieces presented in vanity sizing. “We’re very generous with our sizing,” he said. “We’re becoming more of a contemporary missy line.”
At WWDMAGIC, Picadilly plans to show nine different groups, instead of its traditional 12. Pieces include safari and abstract print rayon tops, dresses and skirts, as well as crinkle fabric dresses, cotton and spandex jackets, tops, pants and skirts and cotton, silk and chiffon tops.
“Bold prints will be very important,” he said. “They’re easier to sell.” Wholesale prices range from $20 for a top to $45 for a jacket.
Picadilly also looks to grow its Svetlana division, which it introduced last year, and Dombrowsky said reaches a new audience. In contrast to Picadilly, Svetlana features sexier, trendier, more fashion-forward pieces with European styling geared toward specialty stores.
Buyers at WWDMAGIC will encounter eight groups from Svetlana, including graffiti-print tops, pants and jackets; embellished shirts; printed raincoats; lime green and black denim, and border-print silk and chiffon dresses. Wholesale prices average between $20 and $85.