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Credit Issues Haunt Specialty Stores Shopping Cobb Show

Retailers shopping the Cobb Show late last month saw a slight uptick in business in the spring, but sales have been very sluggish this summer.

ATLANTA — Independent retailers have been hit by a double whammy this year: soft sales and the credit crunch.

 

Retailers shopping the Cobb Show late last month at the Cobb Galleria here saw a slight uptick in business in the spring, but sales have been very sluggish this summer. Traffic at the show was off, too, which exhibitors attributed to two things: July is the worst retail month of the year, and MAGIC was around the corner.

 

The lack of availability of credit to small businesses is hurting retailers and vendors. Exhibitors said more manufacturers are requiring their retail customers to pay by cash on delivery, money order, company check or a credit card. Emmitt Combs, who opened Swavvor in Albany, Ga., in May, said he has to pay cash on delivery for everything.

 

Mickey Rose — who sells Scarface, Vecta, 7th/38, Under Glass and NASCAR & Friends — summed up the retail climate by saying, “I’ve been in this business for 40 years, and this is the worst I’ve seen it. It’s the most confusing and the most financially disabling. Major stores are hurting the small stores by selling like product [including name brands] at inexpensive prices. Credit is extremely selective, and credit cards are the new net 30 days.”

 

Retailers said they’ll be glad when summer is over and fall returns. Even back-to-school is expected to be tough this year because many state governments removed the tax-free holiday that has helped spur shopping in the past.

 

“Back-to-school used to be a big issue, but now the sales-tax break is gone,” said Tony Shirley, manager of KWYS Fashion Boutique, Decatur, Ga.

 

Buyers were at the Cobb Show shopping for new trends for fall and looking for bargains. They wanted slimmer jeans, as well as other lifestyle looks, specifically board sports. Neff Headwear, a new exhibitor at the Cobb Show, did well at the show with its snow and skateboard styling in beanies and other accessories. A spokesman said the Cobb Show is its first urban-based show.

 

Helly Hansen also exhibited for the first time at the Cobb Show, showing technical jackets, footwear, and some apparel. Rocksmith, also new at the show, achieved its objective, which was to increase its Southern store customer base.

 

Shirley said his sales are down in what is the hottest summer he can remember. However, he is not cutting back on fall, although he will buy less up front and then reorder once he sees what customers want.

 

“I feel better about fall,” he said. “The colors are good.”

 

Like other urban lifestyle stores, his store is transitioning to premium brands and has been doing that for three years. The brands he booked included Coogi, Crown Holder, Parrish, Rivet de Cru, Cipo Jeans and Art Vandelay.

 

James Awolaru, owner, Boughi, Orlando, Fla., said his sales are down about 25 percent and he is cutting his initial fall bookings by the same amount. He was filling in on shirts, footwear, shorts and jeans for b-t-s, and booking Coogi, Rocawear, Akademiks, Live Mechanics and Bob Marley for fall. He also picked up several generic, off-price brands in order to get his prices down and give his customers a good buy.

 

“I’m trying to diversify more to survive,” he said, adding he feels optimistic about fall. However, he said credit is “nearly impossible” to get. “You have to buy less, because you can afford only so much, whereas if you’re being financed, you can buy more.”

 

Felix Fanti, president, Jeans.com, a 39-unit chain based in Vega Alta, Puerto Rico, said his sales are flat. “We’re able to make our numbers because we have been promoting more, but we’re building it in,” he said. He said the extension of unemployment benefits has helped, and he expects a further uptick in business when government stimulus payments are released.

 

“The big disappointment for us was no sales-tax holiday this year,” he said.

 

“Fashionwise, everything is getting tighter and skinnier,” he continued. “Hip-hop is dwindling, and surf is growing.” Even so, Ecko and Southpole perform very well for him because of their graphics and price points. He also booked urban brands Enyce and Miskeen at the show, as well as Escapism for skinny jeans and surf looks.