SMALL BRANDS MAY GAIN IN RETAIL SPACE RACE
Byline: Karyn Monget
NEW YORK — The way department stores have chased megabrands — and cavalierly ignored smaller, independent labels that do not have a national presence — may be about to change.
It’s an unpleasant situation that entrepreneurial firms have been experiencing in the past several years, during which a number of small players have been pushed aside for high-volume megabrands.
Last week’s announcement concerning Calvin Klein Underwear and J.C. Penney is a key topic of conversation among innerwear executives (see related story, page one), as they face 2000 with a bittersweet hope that perhaps brands that are not supported by deep corporate pockets, and do not have carte blanche on a department store matrix and in sprawling innerwear departments, could regain a foothold at department stores.
This renewed hope comes from the decision by The Warnaco Group to break the glass ceiling at department stores and sell its prestige Calvin Klein Underwear brand to J.C. Penney. The move, of course, is intended to build market share of Warnaco’s Calvin Klein products. But the aftermath of such an audacious parlay could help lesser-known labels flourish once again at department stores, say vendors.
Generally, manufacturers said innerwear business during the second half of 1999 has been strong in several key classifications, and they expect the momentum to continue into 2000. Ideas include:
Luxury goods such as cashmere robes, long and short peignoirs with beautiful lace trims, and sleek velvets and velours.
Anything that ties into lifestyle and relaxation, especially at-homewear items in soft tailored looks like tunics and drawstring pants and little chemises that have a ready-to-wear flavor.
The demand for microfibers and allover seamless styling is expected to continue raging in the foundations and daywear areas. But cotton is expected to make a big comeback in all categories — from panties and related daywear items, to sleepwear and at-homewear.
A new breed of contemporary looks that transcend the baby boomer, Generation X and Generation Y crowd.
Charles L. Nesbit, president and chief executive officer of the Sara Lee Intimate Apparel unit of Sara Lee Corp., said, “Our plan is to continue supporting all of our brands with strong new product introductions. In addition, we will add a new business to the portfolio in early spring with the relaunch of the Lovable brand. Strong marketing support for all of our brands, including TV advertising behind major initiatives, will continue to be a key driver of year-2000 business.”
Nesbit noted the key performers for Sara Lee USA during the second half were new products and the introduction of the Barely There allover seamless brand. Other hits included seamless daywear and panty programs by licensee Ralph Lauren Intimates and mass brand Hanes Her Way.
Nesbit added that Sara Lee had softer-than-planned sales in department stores this fall, which was consistent with the overall industry picture in 1999.
Regarding 2000, he said, “I am concerned about intimate apparel sales softness in the department store channel. My perception is the business has become so overpromoted, the consumer no longer responds to deep and frequent discounting of major national brands.
“In addition, the status category has failed to attract enough consumers to justify the inordinate space allocated to the increasing number of brands. Victoria’s Secret appears to be increasing its share of the mall consumer’s intimate apparel purchases. They are building strong consumer equity with smart merchandising, heavy TV advertising and a great product at a time when the national department store brands are relying on price alone to drive their business,” said Nesbit.
Rhonda Harper, vice president of marketing for the Vanity Fair Intimates unit of VF Corp., said change would be the biggest challenge in 2000.
“The impact of the Internet and e-commerce is dramatically affecting the rate of change. Our customers are facing a new retail environment where they are creating new e-commerce solutions as well as adapting to the influx of new e-tailers.
“Fashion trends are hitting faster and changing quicker as trends now have the ability to hit the world stage simultaneously. Clearly, we see this will affect our product development cycles and sales strategies. We are keeping alert to this changing environment and maintaining our flexibility to meet these new market conditions.”
Michael Fitzgerald, chief executive officer of Wundies Industries Inc., said, “Wundies had a 9 percent increase in sales in 1999. Our initiatives for 2000 will be to double the size of the Wundies seamless panty business under the Danskin brand, enhance the LovePats brand with the introduction of a knit-in Ultimair crotch lining, expand our girls’ intimate apparel business through additional distribution of our Maidenform bra collection for girls and expand Danskin cotton long johns for girls for use as underwear and sleepwear.”
Generally, Fitzgerald observed, “I see a slow start to the new year at the wholesale level, because the customer has been binging on excess accumulation of basics as part of the Y2K hoarding psyche. However, a strong macro economy will return consumers to higher levels of buying during the last three quarters.”
Richard Murray, president of Wacoal America, said, “We are looking again for Wacoal to be at least 7 to 8 percent ahead in sales in 2000, about the same as 1999. We expect the [licensed] Donna Karan Intimates and DKNY Intimates division to be up 5 percent.”
Commenting on Wacoal’s biggest challenge next year, Murray said, “There continues to be a general oversupply of product that will put even greater pressure on retailers and manufacturers. The big question is, how do you keep going through this grinder and come up with a profit?”
Kathy Nedorostek, president and chief operating officer of Natori Co., said, “We are very bullish about our business forecast for 2000. We plan to continue strong growth and keep the momentum in our contemporary Josie brand. We feel that our continued emphasis in product development, combined with increased door-penetration strategy, will lead us to a very healthy year.”
Nedorostek noted that “Initiatives” for 2000 would include catering to the “core Natori white label customer” with classic merchandise, as well as “reaching for a wider customer base by offering more modern design concepts.”
The Natori black label collection will continue to offer sophisticated, modern and new design concepts, she said.
Looking at 1999, Nedorostek added, “The single biggest home run we had was the relaunch of the contemporary Josie brand, which encompassed sleepwear, at-homewear, daywear and foundations.” Casual lifestyle merchandise continued to be a big-ticket item, she said.
Richard Leeds, president of Richard Leeds International, said, “Our focus for 2000 will be to strengthen our novelty business with the introduction of new and recognizable brands. We have signed a comprehensive licensing [agreement] with Tootsie Roll candies for intimate apparel. The license includes Dots, Sugar Daddy, Sugar Babies, Junior Mints, Pops, Charleston Chews & Charms and, of course, Tootsie Rolls and Tootsie Roll.
Carole Hochman, president and ceo of Carole Hochman Designs Inc., said, “I would like to see us regain the position of status again at department stores, because we are a status brand, instead of being relegated to the back of a department. We have the consumer recognition, but not the retailer recognition.
“This is the first Christmas a store like Bloomingdale’s has taken my designs from the back and placed them front center. Hopefully, more of this will happen following the Calvin Klein-Penney’s deal.”