Now that outsourcing is more the rule than the exception, and every month seems to bring newcomers to the junior and young contemporary categories, existing vendors in these arenas say the business is more challenging than ever.
Despite increased competition, vendors for the most part agree that demand for well-priced, of-the-moment clothing remains high, fueled largely by what celebrities are spotted wearing in the pages of tabloids. And in an age of instant communication and high-tech resources, when detailed pictures of samples can be sent in seconds from a factory in Delhi to an office in New York, vendors say they can focus on the most important component of the business: staying on top of the trends.
But it’s not always as easy as it looks. Despite the lower labor costs overseas, doing business in other countries can come with its own set of problems, ranging from import quotas to unavoidable calamities like the recent floods in India.
New York-based Blue Plate, which produces entirely in India, has been able to capitalize on fashion’s current obsession with embellished, ethnic-inspired tops and skirts. However, the recent flooding in Mumbai coupled with an abundance of religious festivals and holidays in India have inevitably held things up. Although production was halted for a couple of weeks, careful planning helped the company to still meet its deadlines.
On the whole, Blue Plate, which ranges from $12 to $60 at wholesale, is having a good season.
“We’ve seen a 30 percent growth in the last six months,” said Blue Plate designer Seema Anand. “We have had to increase production to be able to offer quick deliveries to stores.”
Fortunately, the company’s manufacturers in India have been responsive to those needs. “The people who work with us [in India] are aware of how competitive the market is, and that they have to work hard and according to American standards and timing. They can’t be lax about it,” Anand said.
Still, designers say that the best way to ensure that production is going smoothly is to be there in person. At Joy Clothing, a New York-based maker of embellished separates and shrugs manufactured in India, designer Harrison Pontikis travels to India every few months, for up to five weeks at a time.
“He works on all the prototypes there,” said Nancy Ebert, a sales executive with the company, which sells under the labels Majick and Paradise in specialty stores nationwide. “We also use state-of-the-art computers with digital scanners. So it’s less difficult to manage than it was just a few years ago.”
Vendors generally agreed that although business in the junior and young contemporary sectors is robust, they couldn’t afford to be relaxed about it.
Mark Hanono, vice president of sales at Fried Denim in New York, said that although being creative was among the most important elements in generating healthy sales, he agreed that it was a “tough business,” owing largely to increased competition and the necessity of staying on top of production.
“The market is still tough, especially now, and especially given the problems with quotas going on in China.”
Like the majority of garment producers who outsource overseas, quality control is always a crucial issue, as Fried’s in-house designers must be able to convey the latest trends to foreign producers in Hong Kong and China, who must then create a quality garment.
“You have to be able to shop the trends and then get them to the stores as quickly as possible,” he said of the line’s jeans, tops and sweatsuits that wholesale from $12.50 to $16.
Denim, in particular, is one of the fastest-evolving product lines in the junior and young contemporary sectors. Billy Hunter, who worked with major denim names such as Mudd Jeans and Jordache before launching Wet Jeans in New York six months ago, estimated that his brand-new line is on track to do $2 million in sales in its first year. But even that kind of success can be hard-won, given the challenges of outsourcing.
“It becomes more difficult because of the lead time and the quota situation,” he said, of his Chinese-produced jeans that wholesale for $15 to $21. The only way around it, Hunter said, was to form alliances with the right manufacturers in that part of the world, and to constantly stay on top of production and delivery schedules.
Then there are additional challenges, which Hunter said he has learned from experience. “I know the mistakes to avoid,” said Hunter. “Like not reacting to trends as quickly as you should, letting things get stale, thinking you can live on your name. You always have to be a step ahead.”
In his case, staying ahead of the competition means taking cues from the red-hot premium denim labels. “We look and see what the better companies are doing, and translate that in our market,” he said.
But acting on trends, which can change by the week, can also lead to higher overhead. At Joy, where dresses range at wholesale from $23 to $26, and tops are $8 to $18, Ebert said it is becoming increasingly difficult to keep prices accessible.
“Everybody wants a lot of embellishments, and fabrics like chiffons and velvet burnouts are more expensive,” she said. “It’s a matter of trying to negotiate good prices so we can keep our own costs down.”
The need to stay fully current with what young shoppers want extends through all product categories. Milton Barad, sales manager at Volatile, a Carson, Calif.-based maker of footwear for the 18- to 30-year-old market, said that certain things never change, like the impulse buying that is key to the shoe business.
“Footwear is becoming a lot like ready-to-wear, where there is a lot of change and inventory turns faster and faster. Things are in and out in no time.”
Although Volatile has been considered primarily an athletic brand since its inception a decade ago, it recently launched a dressier line, which wholesales from $16 to $25 and is sold at majors such as Nordstrom as well as independent boutiques.
“When you start thinking about young women who buy clothing and shoes, it’s all about who the idol is right now — first Madonna, then Britney Spears and then Paris Hilton. She’s considered sophisticated, and that’s the kind of change we’re seeing in the young women’s shoe business” said Barad.
Because the new offerings tap into the current demand for pretty and feminine footwear, Barad said that the dressier end of the collection already makes up 60 percent of the brand’s shoe sales and should lead the company to a roughly 20 percent increase over the next year.