DESIGNER FIRMS FEELING STRONG
Byline: Miles Socha
NEW YORK — Stable, but challenging.
That’s how Ron Frasch, president of GFT USA Corp., described conditions in the designer category, which is banking on attractive color, must-have items and flawless deliveries to keep the business humming next year.
“Quite frankly, we had a very good fall, so we’re feeling very strong,” Frasch said. “We feel strongly that we’re on the right track.”
Still, echoing most designer vendors, Frasch said he’s forecasting modest, single-digit growth for the designer category for the first half of 2000. GFT USA’s major designer business is Giorgio Armani Le Collezioni. Frasch said Armani has added more color to Le Collezioni and created more items, particularly knitwear, that customers can buy to spice up their wardrobes. He said demand is high for “multiple-end-use” clothing.
“The customer has been moving away in many ways from buying outfits,” he said. “There’s more of a a trend to buying items. The clothes have to do a lot more for the customer. The day of the single look is history.”
A new focus on items emerged as a common theme for vendors as they discussed their prospects for the next six months.
“The business has been very item-oriented,” said Cheryl Sterling, president and chief operating officer of Collection brands at Polo Ralph Lauren. “Knits and separates in color have performed well. And we have seen strong results in our evening business with the millennium.”
Overall, Sterling described Lauren’s Collection business as “very strong” in 1999, which bodes well for next year. “We have seen an increase in bookings over our plan for spring 2000, and based on that, we have increased our original plan for fall 2000,” she said.
Sterling declined to provide percentage projections but said bookings on the “runway line” were consistent across all categories, with gingham, leather and evening looks the key fashion trends.
She said the Ralph Lauren Collection will remain focused on expanding its global presence and increasing its business “through the appropriate doors.” She noted that Polo brought its spring 2000 women’s collection to Milan last September and picked up additional doors. “We are very optimistic about our business over the next six months based on the positive reactions from all of our retail customers.”
John Idol, chief executive officer of Donna Karan International, acknowledged that the fall 1999 season has been difficult at retail for the Donna Karan New York Collection, which made a strong statement with double-faced cashmere for the season and has run up against unseasonably warm fall and winter weather. However, he said resort deliveries, markedly lighter in fabrication and with additional color and beading detail, are experiencing strong sell-throughs.
“In general, our collection business has been moving ahead,” he said. “I think the category in general has been very healthy, and we see growth in our collection business, particularly with our Signature portion.”
Karan’s Signature line, which is merchandised with her designer collection in many doors, is priced in the gold-range price tier, between bridge and designer. Idol said the company aims to double its Signature business over the next two years.
Idol also noted that the company plans to fortify its women’s collection business in 2000 with additional brand extensions and the fall opening of a Manhattan flagship, which is being funded by Karan herself. He noted that luxury watches under the Donna Karan New York label are slated for an introduction in 2001.
“The biggest challenge in being successful today in the designer level business is creating the entire lifestyle brand,” he said. “Today you have to compete on all of the fronts to make your brand well known.”
Acknowledging the finite distribution channel for designer apparel in America, several vendors said they plan to focus on perfecting and streamlining the logistics of the business.
Frasch said established brands must find ways to increase their business on a comp-door basis, which requires a “more significant focus” on the point of sale, from the delivery to training to finding “cost-efficient ways” to support the sales floor.
“Improving full-price sales: to me that’s the name of the game,” he said. “The basics of running the business have become paramount.”
These basics include perfectly timed and complete deliveries and tight controls on pricing and product development.
Of course, attractive product can always win the day. Said Frasch: “People don’t buy clothes because they’re on the floor on time. They buy them because they’re great clothes.”
Barbara LaMonica, president of Michael Kors, echoed the sentiment, accounting for the fact that spring 2000 sales were double the previous spring’s.
“We know that our customer is looking for upbeat, luxurious sportswear,” she said. “These are clothes that you want and have to have, but don’t necessarily need: colorful, sporty, casual pieces that are sportswear in the truest sense.”
But Paolo Wolfram, ceo of Gilmar USA, which distributes the Iceberg Collection and Victor Alfaro’s signature line, agreed that “excellence in execution,” from shipping to training of sales associates, is becoming more fundamental to success.
“It’s obviously a very competitive market,” he said. “The consumer of designer clothing is becoming more and more educated. The power of the brand is obviously important, but quality and fit are also a key priority.”
Wolfram agreed that consumers are no longer relying on one label for their wardrobes, but seeking out items.
He is forecasting a healthy 45 percent increase in the designer category next year, thanks to the fall 2000 launch of Victor Alfaro’s secondary line, Vic. by Victor Alfaro, which, as reported Tuesday, will be priced 40 percent less than his signature collection.
Aeffe USA, which distributes the Moschino, Jean Paul Gaultier, Alberto Ferretti, Narciso Rodriguez and Ozbek collections in the U.S., credited color, ornamentation and an items focus for perking sales this year and predicted the trend will influence business next year.
“We’ve done extremely well with all of our signature collections, particularly when the item was something special in the color or the ornamentation,” said Michelle Stein-Borgna, Aeffe USA’s vice president of sales and promotions. “We’ve had a very good fall.”
Looking ahead, Stein-Borgna is forecasting a 15 percent increase for the first half, based on good reaction to resort and pre-spring merchandise.
“The designers are responding to the need for more color and more interesting and unique merchandise in the early deliveries,” she said. “I’m looking forward to a very strong spring.”
Over the past year, designer firms have encountered some new competition from the gold range. Some of the brands, including Max Mara, Piazza Sempione, Strenesse Gabriele Strehle and Rene Lezard, have made substantial inroads on the designer floors in some large stores.
Yet most executives downplayed the impact of their encroachment, arguing that “secondary” or “fringe” designer vendors would be affected most.
“Most of the stores have really tightened up the assortment,” Frasch noted. “They’re more focused on the power designer players.”
At Richard Tyler, the gold range is where the designer’s Collection line is positioned and ranks as one of his fastest growing businesses, according to Lisa Trafficante, president of Tyler Trafficante Inc.
“With Collection, we’re easily growing as much as 100 percent every season,” she said. “We’re recognizing the need in the market for very desirable quality at a price. Our clothes are a little more feminine and sexy than what’s usually offered in that area.”
Trafficante noted that the Collection line, which is priced less than its Richard Tyler Couture and Richard Tyler Bride labels, is in about 20 retail doors. The goal is to expand that to 50 next year.
And in what she hopes might be a harbinger of a new trend in the designer category, Trafficante noted that retailers have been asking for more jackets from Tyler. Once 80 percent of the business, jackets now account for possibly 30 percent of sales.
“I’m hoping that’s one of the key trends,” she said. “Certainly we’ve seen the trend of people dressing more casually in separates and knits, but we’re seeing there may be a swing back to a more polished look.”