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Companies expect economic concerns to put a damper on sales.
This story first appeared in the February 12, 2008 issue of WWD. Subscribe Today.
Juniors’ vendors march on in the face of slowing sales, hopeful that new business strategies and a possible economic stimulus plan from the government will turn the tide in their favor.
Industry players who plan to attend WWDMAGIC this week are banking on funds from the White House stimulus package to help back-to-school sales and juice fall buying. They’ve been putting on a brave face at a time when economic pressures are in the glare of the spotlight, tamping the sales drive of consumers as witnessed by the ho-hum holiday season.
“Of course we’re excited,” said Ady Gluck-Frankel, creative director and president of New York-based Necessary Objects, which will be exhibiting in the junior section at the show. “If it helps their mood, their psychology, then it can make a positive impact. When people feel good, they want to wear clothes that reflect that mojo.”
Teen-oriented businesses could use a little charming to keep sales pumping. December polarized the category with distinct winners and losers. For example, The Buckle in Kearney, Neb., posted an 18.7 percent gain in same-store sales compared with the year prior, as did Everett, Wash.-based Zumiez, with a 3.9 percent increase. They outpaced competitors such as American Eagle Outfitters and Abercrombie & Fitch, both of whom registered same-store sales declines of 2 percent.
Even as apparel sales grew 7.5 percent to $27.1 billion for female teens ages 13 to 17 for the 12 months ended Nov. 30, according to industry tracking firm the The NPD Group Inc., the mixed messages mean stores and vendors are playing it safe for now, expecting tighter orders at the show.
“We expect most retailers will be spending about the same or less this year,” said Sandy Richman, principal at Directives West, a Los Angeles-based buying office. “Everybody is price-conscious no matter their age, so brands have to be quicker and sharper in their deliveries.”
Price is the mantra of 2008. Wendy Red, owner of Up Against the Wall, a chain of 25 junior stores based in Washington, said she plans to keep her fall buy similar to last year.
“We’re looking for better margins from vendors,” Red said. “We anticipate shoppers will be watching their dollars compared to last year. People are getting scared so we’re keeping that in mind.”
For their part, vendors are scrambling to get a handle on what categories to exploit. Richman suggests that the tops business will continue to dominate in the b-t-s season, thanks to tunic styles, layering looks and message T-shirts. Sweaters also represent “a major opportunity” for shoppers hungry for newness. She sees the most struggles in the pants sector, notably in denim.
“They’ve got to get the bottoms business in line,” Richman said. “There are still issues with denim.”
Denim makers say they’re exploring new silhouettes. New York-based Jou Jou sees momentum in skinny jeans and wide-leg jeans, which took a while to catch on in the junior category after a stronger run in the contemporary market. Adding a new silhouette in the form of denim trenchcoats also has resonated with retailers, said Robert Acampora, executive vice president of sales at Jou Jou.
“The denim business is behind last year’s sales, but we believe new things like deconstructed and acid washes will propel interest in the consumer,” he said.
Other vendors concur with Acampora that opportunities abound in denim, so much so that Hot Kiss owner and founder Moshe Tsabag is looking for a “bigger share of sales” compared with last year, with strength in denim dresses and jeans in wide-leg and skinny varieties.
Tsabag believes retailers can’t afford to play “Mother Hubbard,” lest they concede sales to competitors.
“The stores can’t sell with empty shelves,” he said. “They need fresh merchandise in the stores. If a customer sees old stuff on sale, they’ll just go to the next store.”
Just two years ago, competition was fierce in the jeans market, and design experience didn’t seem to be a criterion in making premium denim. Today, newcomers seeking market share in the category are demonstrating better street cred. New York-based Pure Clothing Co. is introducing its fall line of Beverly Hills Polo Club Couture denim jeans, knit tops and woven bottoms at WWDMAGIC, following its November spring introduction. Laura Willson, owner of Pure Clothing, is banking on relationships already established by the men’s Beverly Hills Polo Club line, as well as its global appeal, to generate sales.
“We have validity already with the men’s line and we’re already well received in Europe, Japan and India, who view us as a premium brand,” Willson said. “We’re in a good position because we’re coming to the show with newness and department stores want new, unpolluted brands whose prices aren’t corrupted by overly saturated distribution.”
With wholesale prices ranging from $6.50 to $13 for its yarn-dyed plaid Bermuda shorts, little denim jackets and brand-driven jeans, Willson hopes the line will lure cost-conscious retailers who don’t like Baby Phat prices.
“We still have the bells and whistles, but customers won’t have to pay $78 [retail] for us…because we don’t have a rapper or musician behind us,” she said.
To reach different customers, vendors are broadening their retail distribution across economic channels. Chico, Calif.-based Fifth Sun hopes to reach independent retailers and midtier stores such as Kohl’s and J.C. Penney with its new junior line featuring Kat Von D tattoo art T-shirts in tunics, V-necks and tanks under the L.A. Ink license. It’s also introducing Smokey Bear and Woodsy Owl T-shirts in bright, playful silhouettes.
“I think the opportunities are in hitting all tiers from mass to boutique,” said Siana Sonoquie, merchandiser and illustrator for Fifth Sun. “We create different programs for each.”
There’s no shortage of T-shirt lines making a play for retailers at the show, with ample varieties from neon styles and rock imagery at City of Industry, Calif.-based A Fine Mess to the organic renditions from Levi’s Juniors and Mighty Fine. T-shirts have an edge on other clothing items since they can reinvent themselves with new licensing agreements. Playboy has asked bands such as Duran Duran, Daft Punk and The Heavy to put their own spins on the Playboy Rabbit Head by each designing a T-shirt, said Adrianna Chinnici, vice president of licensing for Playboy Enterprises Inc.
The popularity of the plebeian clothing item also belies the fact that teens always have something to say or express, especially in an election year.
“We interpret pop culture and the topic of the moment,” said Justin Watson, marketing director of Mighty Fine, which will also unveil new partnerships at the MAGIC Marketplace with Hot Wheels and “Sex and the City.”
T-shirt companies also are demonstrating their flexibility when it comes to working with retailers, and their customer service perks are boosting sales. A Fine Mess, which anticipates a sales increase this year, is providing test runs to customers on screen-printed items.
“We’re doing more tests for retailers,” said Sara Armstrong, sales coordinator for A Fine Mess. “A lot of our customers are taking advantage of it. They want to make sure that what they’re buying into is right for the customer. They’re willing to make the buy — they just want to make the best buy.”