VENDORS SEE BOOM CONTINUING

Byline: Wendy Hessen

NEW YORK — There may be a few rough patches, but for the most part, vendors expect the momentum of this year’s strong accessories results to keep fueling business well after the turn of the millennium.
Handbags and jewelry are likely to be the leading classifications, hair accessories have cooled after almost two hot years and the scarf business will, in many cases, be determined by pashmina’s performance.
Other key issues:
Although a few industry executives say they think novelty and embellishment will have had their day by fall, most companies are still betting that all manner of decoration and color will continue to lure consumers to accessories departments next year.
Items, rather than collections, will likely remain a driving force for most classifications. Even though gambling on choosing the right items at the right time and facing the challenge of merchandising one item after another have been a headache for many industry executives, that demand for the next great piece probably won’t slow next year.
The Internet has become the 500-pound gorilla: It can no longer be ignored, and companies are devoting more time and resources to mold the technology to suit their operations.
In the category as a whole, increases are expected to reach mid-to-high single digits. The hottest classifications, however, could register significantly bigger gains, upward of 20 or even 30 percent. More growth will be sparked by the launch of new licenses, expansion into home accessories, Internet sales or unusually hot items that emerge throughout the year.
“Accessories business in general looks promising,” said Drew Pizzo, president of scarf maker Collection XIIX. “We have seen a rising level of interest in style, particularly among younger women.”
Helen Welsh, president of the accessories division at Liz Claiborne, characterized the firm’s outlook as very strong, largely due to the ongoing demand for novelty. “The more novel, the better,” she said. “Novelty, combined with an item approach, will continue to drive business.”
Welsh said handbags would still enjoy the largest amount of growth next year, again because of intensified interest in diverse materials, trimmings and color. Though wraps and bracelets will be key items in 2000, she said hats and belts would gain momentum.
Designer Sarah Shaw, known for her handbags in materials like peony-patterned stamped leather or Indian sari silks, also sees no signs of the novelty or color waves cresting. “Femininity is really coming back, too,” said Shaw. “I’m working on lighter versions of sari fabrics with hand-painting and beading, and some floral vine patterns. Hair calf will also continue, but in new ways and mixed with other fabrics, like UltraSuede. Texture will be big next year, as will all sorts of colors, from pastels to brights for spring and summer, then dusty jewel tones for fall.”
Abe Chehebar, president and chief executive officer of Accessory Network, is projecting healthy growth. “The numbers from our division managers represent an increase of about 18 percent in 2000,” said Chehebar. “Our bag business is growing dramatically. It will see the biggest growth next year, about 35 percent. We see incremental opportunities in the midtier department store level for our licensed Gloria Vanderbilt line, and we have signed a license to develop men’s, women’s and kids’ merchandise for Union Bay. We will have a modest launch in January, then a full-blown debut in March for fall store deliveries.
“Handbags have taken a lot of market share away from small leather goods and we expect that area to be flat next year. Hair accessories have definitely peaked. We’re supplementing some of that business with a small line of costume jewelry. There will be about 15 items, a tight assortment of fashion trends.”
Items have become the lifeblood of jewelry designer Roxanne Assoulin’s company. Two years ago, she added the Lee Angel brand as a way to tap into the burgeoning items craze, and the line has grown so much that she decided to suspend production of her namesake line.
“It has been worth it to take our energy away from the signature line,” said Assoulin. “Lee Angel was generating five times the volume. We’re using both production departments to service it. After nearly 10 years of wearing no accessories, people just want trendy, happy, easy-to-wear pieces at great prices. We’ve grown an amazing 700 percent in the last year.”
Assoulin said bracelets would probably be the hottest items, but chain and fringe necklaces and belts were coming on strong. And she said gold would finally make a real comeback.
“The key is to make gold look young, yet still make a statement,” she said.
Gold jewelry is expected to drive some growth at Swank, said John Tulin, president and chief executive officer.
“We will see much more with mixed metals and a lot of gold in a variety of finishes,” said Tulin, whose firm produces the licensed Anne Klein, Kenneth Cole and DKNY jewelry lines, among others. “Even those who used to say they hate gold are asking for it now. Earrings still have a long way to go before we see a strong comeback there, but the toe-ring business is good. The reaction to the DKNY line has been good at retail, and we are very optimistic about it.”
Tulin is cautious about business overall, however.
“Overall, we are looking at low-single-digit increases,” he said. “We need to carefully watch the economy; also, our market penetration is enormous, particularly in the men’s area. In such a mature business, every point of growth is difficult to come by.”
But the Internet could become a greater source of revenue.
“People are getting more and more relaxed with Internet shopping,” Tulin pointed out. “We tiptoed at first, but are now committed. We will start promoting our presence there in our ads this spring. If it became just 5 percent of our total, that’s $7 million to $8 million. It will probably take about three years, but we think it could become a $10 million business in that time. The world is on the Web — there’s no point in being coy about it anymore.”
Some scarf makers are weary of trying to nudge stores into creating more consumer-accessible merchandising strategies, while others just want to know what will happen with pashmina. Collection XIIX’s Pizzo said the two challenges for next year will be centered on these issues.
“The business has shifted from emphasis on neckerchiefs and oblongs to wraps and stoles driven by pashmina for day and beading for evening,” he said. “They have gone from 5 percent of sales to 25 percent or more in the last year.
“The stores that have responded quickly with good displays and service have done well. There is a great opportunity to translate the wrap trend, regardless of the material. We see some real potential in that — wraps have function as well as fashion, and that combination is always a winner.”

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