MARKETERS SUFFER MILLENNIUM MELTDOWN

Byline: Anne D’Innocenzio

NEW YORK — Marketing the millennium was supposed to be a no-brainer.
There were visions of shoppers snatching up sweatshirts emblazoned with such logos as “Y2K,” “Year 2000” and “,” purchasing anything with beading for day-into-eveningwear, and buying up taffeta ballskirts and velvet dresses for their New Year’s Eve extravaganzas.
In reality, that scenario is turning out to be only partially true. In fact, pitching the merchandise to the consumer, who’s becoming increasingly millennium-weary, has been trickier than expected, according to sources.
While sales of home accessories such as snowglobes, champagne flutes and candles have been stellar across the board, consumer reaction to apparel pegged to the event has been mixed. T-shirts and other clothing blatantly screaming “millennium” have been disappointing, while beaded daywear looks, which stores chased earlier this fall, ended up being oversaturated on the selling floors and proved too pedestrian for the consumer.
On the other hand, sales of special-occasion eveningwear were explosive, driven by versatile separates such as ballskirts. Women want to be dressed up but comfortable for the occasion, with many of them destined to spend the holiday at home with friends and family, not at lavish balls.
Overall, the winners in the millennium game include such retailers as Saks Fifth Avenue, Macy’s West, Jacobson’s and even J. Crew, which did well with its special millennium collection of $350 strapless evening gowns and $250 tulle ballskirts. Officials from these stores said they were glad they pushed taffeta, velvet and the like in September, a month earlier than usual, and said they are seeing double-digit increases.
On the other hand, there were Bealls Department Store, the 55-unit chain based in Bradenton, Fla., Macy’s East and Rich’s. Buyers there said they experienced lukewarm reaction to millennium business, acknowledging that they may have overbought.
“For the ones that are managing their business, this is turning out to be a good season,” said Jeffrey Edelman, an analyst at PaineWebber. “For others, the holiday business has been lagging. My guess is that the millennium has been a bit overdone.”
Business at Federated Department Stores, he said, has improved, adding that it has gotten more creative with promotions. Holiday sales at Nordstrom, Target Stores and Kohl’s have been strong, he said, but business at Penney’s, May Co., Saks Inc. and Dillards has been difficult.
Meanwhile, entrepreneurs who several years ago jumped on the millennium bandwagon by trademarking “Year 2000,” “” and “Y2K,” have seen disappointed sales, particularly in apparel. More than a year and a half ago, they began unleashing a blitz of products, from accessories to caps, believing the momentum would build. However, they acknowledged, their business never really caught fire.
“If I had to do it again, I would not have introduced it 500 days out. We were ahead of the consumer, and we had too much inventory,” said Kenneth Walker, president of Kenneth Walker Designs, whose trademark licensed products was one of the first to hit the stores, for spring 1998. “The biggest disappointment was apparel.”
Walker added that his launch of 70 licensed products, from giftware to T-shirts, is expected to generate a respectable $100 million, but it’s only half of what he had projected.
“I’m not sure if people really cared about it much before now, and even now, I am not sure if people really care about it,” said David Hahn, president of Nutex, a resort-oriented maker of logo and printed tops,which has the trademark for Y2K. “There has been a lot of hype.”
Hahn said the line of Y2K clothing has done well at resort stores, but not with department stores such as May Co., J.C. Penney’s and Proffitts.
For the most part, he said, the merchandise in department stores has “pretty much dried up,” and he believes he will reap about $3 million, only one-third of projections.
“There was no way to measure it; it’s not like someone was around for the last millennium,” Hahn added.
Meanwhile, some sportswear companies got bruised when they pushed beading and other sparkly looks in their daywear-into-evening styles.
“Stores were driving the millennium business, but it is not happening in apparel,” bemoaned Lynn Fish, executive vice president of merchandising at McNaughton Apparel, a core department store moderate sportswear resource. “Buyers wanted beading, but the customer is overembellished.”
Sixty percent of the collection for holiday was in beaded looks, and Fish said not many styles did well.
“In general, there appears to be a gigantic oversaturation of a lot of the same items,” said Jason Tynan, chairman and chief executive officer of Finity Apparel, a better sportswear company that increased its offerings in beaded styles from last year’s 15 percent to 25 percent. “Everyone was doing beaded looks, from Target to Giorgio Armani. There was so much competition. It hurt everybody’s business.
“How many outfits do consumers need to buy? It’s only a one-day celebration. How much more can they get dressed up?”
Clearly, consumers are interpreting the millennium differently from what was anticipated. According to a recent poll from Yankelovich Partners, 72 percent of Americans said they are “not planning to do something special” on New Year’s Eve.
“One thing we found out was that boredom is a big factor,” said Barbara Caplan, a partner at Yankelovich. “The millennium fever began so long ago that people are saying ho-hum. It’s not like a nonissue, but it doesn’t seem to emerge as a huge extraordinary event. That’s why home accessories have done so well. People are gussying up the house for the special occasion.”
“It’s interesting and very telling,” said Wendy Liebmann, president of WSL Strategic Retail. “Certainly, people want to take note of the event and mark the occasion, but the whole thing has been overcommercialized. Across the board, people are saying, I am happy to get dressed up, but it will be in something that I will wear again.”
That’s why stores and designers pointed out that evening separates, which are versatile and can be mixed and matched with more casual attire, have been home runs in special occasion.
“People want to wear something glamourous, but they want modern sportswear shapes,” said contemporary designer David Meister, whose evening separates make up half of his holiday collection.
One of Meister’s standouts at retail is a tie-front top, paired with a fishtail skirt. About 20,000 units of the top, which wholesales for $89, have been sold since being shipped in August, he said.
“Evening separates really exploded the business,” said Jaqui Lividini, senior vice president of corporate communications at Saks Fifth Avenue.
Some of Saks’ standout vendors have been Carmen Marc Volvo, ABS, Tahari and Tadashi, with outfits retailing from $200 to $800.
In addition, Saks did well with $75 “icons-of-the-century” snowglobes, $30 champagne flutes and $175 headbands with a 2000 banner by Gerard Yosca.
At Macy’s West, Marcia Rodgers, fashion director of ready-to-wear, said the store ramped up its offerings of dressy, embellished looks, and had them shipped to its stores in September instead of October. The strategy worked.
“No one really knew how big the business was going to be,” said Rodgers, adding that Macy’s West is running double-digit increases this season in holiday wear. “We were just holding our breath. But the dressy business has been fabulous.”
What’s driving the category, she said, is color, particularly pink, and luxe looks, such as cashmere. Separates, she said, have been the most popular with consumers. What’s been running cool are basic dressy looks and the color black, she said.
Evening separates from Laundry, ABS, BCBG and Tahari Sportswear have been strong, Rodgers said.
Ballskirts, in taffeta, satin and velvet, have been big sellers in all labels, including INC, the store’s private brand, she said.
Asked why some other retailers did not fare as well, she responded: “I think other stores went a little basic. Black has not been terrific. Our assortments were varied enough and deep enough to generate excitement.”
Lavelle Olexa, fashion director at Lord & Taylor, said she was pleased with her millennium business, from champagne glasses that say “2000,” candles and waterglobes to special-occasion wraps and sparkly shoes.
Olexa said the only weak category was whimsical T-shirts.
Other retailers said that their millennium business fell short of expectations.
“The millennium as a license has taken on a home-decor flavor, and while we are seeing good social-occasion selling, I wouldn’t say it is explosive over last year,” said Conrad Szymanski, president of Bealls. “A lot of people thought it would be great.”
At Bealls, “2000” champagne flutes have been bestsellers, with 10,000 units sold since the second week of October, he said.
Surprisingly, Szymanski said, when it came to apparel for holiday, the hot segment was fleecewear, including sweatshirts and sleep separates.
Szymanski said the chain did not buy heavily in millennium T-shirts and “what little we had did not do well,” he said.
Sheila Kamenski, fashion director at Rich’s, said beaded tops with ballskirts were strong, but as a “sportswear thing,” they weren’t good.
“[Business] did pick up, as we are getting closer,” she said, adding that it probably had a little too much inventory.
Kathy Bufano, executive vice president of Macy’s East, reported that holiday business is up just “a bit.”
Ballgown skirts and evening separates, from such names as Laundry and Jessica McClintock, have been big sellers, but “the rest of the pedestrian, beaded looks” have not been doing well,” Bufano said.
Within beaded looks, “anything too garish” did not fare well. Velvet didn’t happen, either.
Items in the home area, particularly champagne flutes, were big sellers, she said. T-shirts that had millennium logos did not do well, she said.”I think,” she said, “people thought it was a little too hokey.”

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