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Keys to Christmas: Color and Exclusivity

Christmas is just around the corner, and stores are banking on exclusive products and “giftable” items, like accessories, to lead the season.

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NEW YORK — It’s never too early to think about Christmas.

This story first appeared in the July 25, 2003 issue of WWD.  Subscribe Today.

Even before back-to-school selling gets into full swing, retailers have begun to hype their holiday items to the media, as they finalize special promotions and seasonal gift shops. Retailers (like most people) both welcome and fear the holiday season. After all, it can make or break the year. But with business in some categories improving in the past two months, there’s a glimmer of optimism.

Most of all, stores are banking on exclusive products, and “giftable” items, meaning less ready-to-wear and more accessories. Cashmeres, fur trims, embellishments, and stress-relief products ranging from therapeutic pillows to aromatherapy are also important. But the number-one must-have in every store’s assortment is color. Brights will cut across all categories.

Among the firsts this year, J.C. Penney is establishing main-floor gift shops, with candy, a category not offered before, as well as crystal, frames and other categories. Bergdorf Goodman will distribute its first holiday catalog and Saks Fifth Avenue is tying in with VH1 and its Save the Music foundation, offering 18 exclusive items all priced under $200 and donating one-third of the proceeds to the charity. Saks will also have a monogram shop at its New York flagship.

In addition, Lacoste will sell cashmere sweaters for the first time, Bath & Body Works is intensifying its “well-being” offerings, and Montblanc says it’s tailoring product distribution to provide retailers with more unique assortments.

“It’s all about doing things differently,” said Bob Mettler, chairman and chief executive of Macy’s West. “It’s about differentiated product. The same old product isn’t going to cut it, even during a Christmas season when key items are important. You have make sure that throughout the season, you have an infusion of fashion, certainly at least every two weeks. Obviously, the last two years were not terrific. There are some signs that fashion is selling. Career product is selling very well,” including suits and better sportswear. “The customer is back in the market. I do think manufacturers have been working hard to come up with something interesting.”

For total fourth-quarter sales, the National Retail Federation is projecting a 4.7 percent gain for general merchandise, apparel, home furnishings, electronics, appliances, sporting goods, hobby, book and music stores reflecting a gradual build through the year from 2.2 percent in the first half, to 4.3 percent in the third quarter, with low mortgage rates, the end of the Iraq war, some pent-up demand — particularly in apparel — and stock market gains all contributing. However, employment is still poor, income gains have been modest, and worries about the unforeseen, like terrorism, keep retailers cautious. Generally, department stores are contemplating flat to 2 percent comp gains, while discounters and specialty chains might be a couple of points higher. Recent sales and inventory trends suggest the margin is narrowing, with industry leaders like Kohl’s and Wal-Mart battling inventory gluts and posting less stellar gains.

“Things are continuing to improve month to month, but you’ve got to respect the fragility of it,” said Charles Chinni, J.C. Penney’s executive vice president and general merchandise manager of home, footwear, fine jewelry and gift assortments. “Business is so fragile, any unforeseen issues would affect us. Outside forces can spook the consumer. But they’ve been coming back. It’s been a relatively calm time since the war. Right now, we are seeing some improvement. If things hold up, we will do some decent [holiday] business, but nothing exceptional. It’s not going to be a record-breaker.”

He said the Penney’s plan is conservative, but if the company makes it, Penney’s could turn in a decent year “after a very tough start.” Penney’s expects fine jewelry, housewares, therapeutic pillows and stress-relief products, throws, down products and crystal to be strong, according to Chinni. The new holiday gift shops will be up in late October.

“Our plan is to achieve between 2 and 3 percent comp increases for fall-holiday,” said Burt Krieger, president of the 39-unit Boscov’s department store chain. However, he expects Christmas to once again be heavily promotional. “Price is certainly going to be an issue.”

And that’s far from the only one.

“The biggest problem, even with some vitality returning to the stock market, is job creation,” Mettler said. “There’s not enough of it to make us think we’ve got a long-term fix on the way. I don’t think we are going to get any lower unemployment, but the question is how fast is employment going to get better and how fast will people feel good about the future.” His objective: turn inventory and turn it faster. “That provides us with a platform to bring in new and interesting product. It’s not just a statistical exercise.”

At Bloomingdale’s, “Business has been appreciably better the last three months,” said Michael Gould, chairman and chief executive. “Bridge and upper- end businesses are doing extremely well. Fall stocks are selling, newness is selling, so we’ll see. We feel very good about our business and all the better parts that differentiate from mainstream.”

Among other items, Bloomingdale’s will emphasize miniskirts in dressy fabrics, bustier tops, jeans, puffer jackets, and accessories. “It will be an excellent time for accessories, particularly with new kinds of handbags, [especially] Fendi, Coach and Louis Vuitton bags,” observed Kal Ruttenstein, senior vice president of fashion direction at Bloomingdale’s. He also underscored color, adding, “there will be very little black,” even in New York.

Boscov’s, which like Sears sells just about every category imaginable, reported a resurgence in career suiting with stretch fabrics, semi-constructed soft jackets, with Evan Picone, JH Collectibles and Rafaella among the leaders. Also, fine-gauge sweater knits, like vests, novelties, woven vests with sweater knit sleeves, monogrammed sweaters, denims in new silhouettes and dyes, corduroy, twill, velour separates and jog sets are expected to continue trending well through holiday.

At Montblanc, “We are really tailoring the assortments to the retailers,” said Karsten Martens, president and ceo of Montblanc North America, whether it’s Neiman Marcus, Saks, London Jewelers or Tourneau. For example, Montblanc is shipping Neiman’s more women’s watches with diamonds, compared with Tourneau, which will receive a higher proportion of sport watches, mainly in steel with rubber straps.

For the last several years, Christmas shopping has been getting later and more concentrated on the week before and the week after Christmas. “Six, seven years ago, we used to be much more focused on one big order in September and some reorders in October or right before Thanksgiving,” said Martens. “Now retailers want it immediately. They don’t want to keep a lot of stock.”

In September, Lacoste, a retailer and wholesaler, for the first time will deliver to stores a line of cashmere sweaters for men and women, with a silver crocodile instead of its traditional green crocodile. “That will give it a more luxurious look,” said Robert Siegel, chairman. He said the company has been moving into more luxury fibers with its shirts, for example, where the emphasis has long been on cotton. Echoing this season’s industry mantra, Siegel said, “Color is key at Lacoste.”

At Tender, a designer shop in Birmingham, Mich., partner Karen Daskas said, “We are always ambitious, hands on, and looking optimistically to a good fall and holiday. Anything from Pucci will be hot for Christmas. People love the color. It’s happy, fresh-looking, and in the Midwest, where we always look at ice and snow, to see flashes of great color is really refreshing.”

Also important for holiday: fur wraps and little fur jackets from Goldin-Feldman and Valentino embroidered evening bags, among other items.

At Bath & Body Works, Beth Kaplan, executive vice president and gmm of flagships, emphasized upcoming stress reducers, such as aromatherapy and home fragrance. Two home fragrance lines will bow — Perfect Christmas, inspired by pine trees and spices, and White Barn New York, incorporating sophisticated fragrances. Also, this fall Pure Simplicity facial skin care and body care will be tested in 60 stores. “Our whole focus is on products for inner and outer beauty and well-being,” Kaplan said. “Holiday is a very stressful time for women. Their priority lists are longer than the day. Between holiday shopping and family obligations, women tend to forget about taking care of themselves.” Another focus at the chain is prepackaged gift sets, in baskets, bags, or metallic containers, and creating your own gift sets.

Victor Lipko, managing partner of Valko Consulting, said, “In terms of trim, furs are hot. There’s fur trim on handbags and neck pieces, like scarves.” He also predicted jewelry will perform better than last year, small leather goods will be boosted by color, though belts will be soft. “The accessory business started to pick up at retail in May and June. While retailers are not looking to have the kind of business they had in 2000, they’ll trend up from 2002. Since May and June, stores have been showing good numbers in fashion accessories. Shoes are very, very strong and everyone remains pretty positive. Based on trends over the last couple of months, stores are expecting holiday to certainly be a couple of points up,” in accessories, the most important holiday category. “Single-digit increases is the best way to put it.”

At Saks Fifth Avenue, Jaqui Lividini, senior vice president of fashion merchandising, cited accessories, gloves, fur trim and details, pearl details, metallic details, luxurious embellishments, cashmere, semi-precious stones and color. “It will be a very luxurious and giftable Christmas.”

Bergdorf’s first holiday catalog will feature about 55 pages of luxury gifts at various price points, and should arrive in homes Nov. 1, said Robert Burke, vice president and senior fashion director. Categories to be included are men’s, women’s, jewelry, accessories and home.

“The overriding theme for the catalog, and store, too, will be luxury-color. Color has been so strong for spring, it’s performing for fall, and that will be the basis of our catalog and store assortments,” Burke said. “In accessories, we feel strongly about gloves, fur, colored handbags, which are representing a very significant portion of our business, designer jewelry, cocktail rings with multicolored stones and unusual settings, and for cruise, which gets delivered in mid-November, floral patterns, short skirts, boucle suits and feminine silhouettes.

“We are very positive about Christmas and feel luxury and high-end goods that are unique will continue to sell. I am very worried about things that are widely distributed.”

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