NEW YORK — Novelty, novelty, novelty. That’s the battle cry for designer and bridge firms for 1995, who say fashion newness — from snappy items to non-basic separates — will be the key to full-price sell-through.
Despite shrinking retail outlets and rising fabric prices, executives are still expecting double-digit increases in volume next year, fueled by consumer interest in new fashion and by strategic planning with stores.
Companies that traditionally relied on basic sportswear are injecting novelty into their mix. Those that source in Europe are looking for other resources as textile prices rise. Those that lost a chunk of business with the closing of I. Magnin are looking to increase the depth of their buys with other retailers or expand their international selling to make up the loss.
Executives are coming off a fairly good 1994, saying they met or exceeded business plans. For 1995, they say they’ll apply the lessons learned this year with greater precision. Those include:
Making sure there’s a constant flow of newness to the floor.
Tailoring merchandise to each store’s demands, creating boutiques and adding their own salespeople.
Increasing international expansion through agents or licensing agreements.
Creative sourcing and even taking a hit on margins to keep prices level.
Stuart Kreisler, consultant for Bidermann Industries for its Ralph Lauren Womenswear business, takes a rosy view of the crunch at retail, arguing that consolidation will be good for big companies because it will “create a need for dominant vendors,” that have a track record of sell-throughs and deliveries.
On the other hand, he said, big manufacturers can’t afford to sit back and wait for the retailers to knock.
“You can’t sit there and think you’re going to sell in every door,” he said, emphasizing the need to merchandise each store separately. “It’s not about basics, it’s about fashion.
“This year, we decreased the number of doors we sell to, but became more dominant in fewer stores. For example, we went from 32 Lord & Taylors to 13, but we still came within $100,000 of what we had done in the 32 stores.”
Keeping a constant flow of new and novelty goods on the floor inspired a few companies to increase deliveries: Isaac Mizrahi president Jennifer Peck said the company has added two deliveries — early fall and early spring — to its existing three.
Each order, she said, will be specifically merchandised for each store. Peck said she’s planning a 25 percent increase for next year.
“We can’t ship six to seven times a year; we have to ship monthly. We need to hold our space at retail, we need it for the monthly budgets, we need it to interest the consumer,” said Mary Ann Wheaton, co-owner of Byron Lars. “People buy what’s special, not what’s specially priced. We beat ourselves to have opening price-point jackets and bottoms, but the sell-throughs come when it looks worth the money.”
Wheaton’s assertion that customers want novelty was echoed by most manufacturers. While dresses of any kind are still going gangbusters, in separates, novelty gets the nod.
“There’s been more emphasis on separates which will accent a wardrobe. Items have to be a little bit special — a detail, a button,” said Michelle Stein, vice president of Moda, which represents Alberta Ferretti, Rifat Ozbek and Moschino here.
“Women are looking for clothes that have a little more style,” said Richard Catalano, president and chief executive officer of Episode NA, a sportswear retailer and manufacturer here. “There are a lot of women who have been successful on their own, and they don’t want to look like they are wearing a uniform anymore. They already own a bucketful of the other stuff; now, they want to make a little statement.”
“We’re turning the line more toward item-driven and away from collection,” said Lisa Engler, president of Susie Tompkins. “The key words right now are novelty, novelty, novelty. If it’s a jacket, you make it a zip front with a self belt — just so it’s something that updates the wardrobe. If it’s a sweater, you put a stripe on it.”
Increased business for some bridge companies such as Tahari and Emanuel came from increased presence at retail, new novelty in the lines, and greater full-price sell-throughs.
At Tahari, president Tom Murry said he’ll expand the number of stockkeeping units in 1995 to give stores more to choose from, and he’s expecting a 40 percent increase in 1995 on top of this year’s 24 percent net increase. Tahari will also introduce a petite line in 1996.
As for other retail expansions, Murry said that Tahari will reopen its Madison Avenue boutique at a new location this year, but that other retail stores are low on the priority list.
Maura de Visscher, president of Emanuel/Emanuel Ungaro, a bridge line here, said her company saw a 35 percent increase over 1993, a result of stronger presence with existing customers and some new doors, she said.
Now that the line has established its core identity, de Visscher said, it will start to reflect more novelty.
“As a newer company that is in a growth phase, there’s still a lot for us to do,” she said, predicting a bold 45 percent increase for next year. “We have a very careful strategy and we really honed in on what we provide. Bridge is always a risk, but it’s a more calculated risk if you have a lot of information.”
The Federated/Macy’s merger and I. Magnin’s closing have more than a few people worried — particularly among the smaller manufacturers.
Designer Anna Sui spoke for several smaller companies when she said: “I don’t own real estate in stores, so eventually [the effect of store closings] is going to filter down. But I have had strong editorial this year, and stores have been buying my whole collection.”
“Some of our strategy with all our collections was to increase their presence at retail, but unfortunately the roster of fine specialty stores is disappearing,” said Moda’s Stein. “We really looked to the cutting edge to be our liaison with the designer customer.”
Ellen Greenberg, president of Magaschoni, said she wasn’t expecting the shrinking number of doors to hurt her business too badly next year.
“My specialty store business is terrific, and if we see the 25 percent increase I’m predicting, then we can roll with the retail punches.”
But she added: “Retail stores are not prepared to house young designers. Some stores have enormous boutiques maintained by the big guys, but they refuse to give smaller designers the real estate, and then they cry over the difficulties of maintaining a young designer business.”
Even big names are feeling the space squeeze.
Gail Cook, president of Dana Buchman, said retail consolidation topped her 1995 challenge list.
“If you wanted to pick one problem, it’s the shrinking number of bridge doors, and how to maximize the remaining business where it’s great,” said Cook. “When we lose an I. Magnin, it’s very sad. We were doing very well there. It was the first time I felt emotional about a business decision. But it should
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only make those businesses that are good get better. The Macy’s/Federated merger should be positive for bridge — I think it will get them going in that area.”
No matter how manufacturers strive to get better business, it won’t solve what Victor Coopersmith, chief executive of Andrea Jovine, calls “the sale mentality,” where stores have trained customers to wait for things to go on sale.
“It’s created a huge obstacle for anyone who wants to sell a real quantity of merchandise at a real price,” he said. “It’s the ultimate case of ‘you make your bed, you lie in it.’ I don’t see any way to resurrect the regular-price business.”
Joseph Greco, president of Gruppo Americano, is testing a theory to see if it’s the price or the markdown that attracts customers.
“Within each label, we’re doing a group at a much lower price point — 20 to 25 percent less — to see if what the customer is really saying is that clothes are too expensive, or if that the fact that it is on sale is what they like.”
As fabric prices continue to rise, firms will be challenged to avoid major price increases.
Executives say they’re negotiating with mills, spreading out sourcing or committing to fabrics early to get a better deal.
“Naturally we’re going to have to price our garments up,” said Ellen Tracy chairman Herb Gallen. “There’s no way to be in business, pay higher prices and not have it reflected in your retail prices — but we’ll try to keep it close .”
“It’s all a question of how smart you are and how hard you work,” said Buchman’s Cook. “We try to get the best prices, and we try desperately not to pass them on to the consumer, but there might be a 5 percent increase. There is extreme pressure on price at retail, and if we can avoid increasing our prices, we certainly will.”
Gabriella Forte, whose move to Calvin Klein from Giorgio Armani this year as president was front-page news, said the most important moves at the company this year were the licensing agreements signed with Warnaco for men’s underwear, the creation of a separate company to develop Japanese business, and with Rio for the jeanswear business, which created the Calvin Klein Jeanswear Co.
Forte said the company anticipates more licensing agreements next year.