VENDORS SEE SLOW BUT STEADY GAINS
Byline: Cynthia Redecker, New York / Kristi Ellis, Los Angeles
NEW YORK — Junior sportswear manufacturers on the East Coast are projecting modest gains for the upcoming seasons.
Out West, manufacturers are also projecting increases, although volume expectations are lower than originally planned. But despite a cautious approach, many junior firms are increasing ad budgets, in-store shops and licenses.
Shying away from the rigid matrix of department stores, Eastern stores remain committed to specialty store distribution as the most important vehicle for business and for conveying their brand message. Novelty, the cornerstone of the junior market, will continue to be the driving force for companies that have to produce their fashions as quickly as their customers are likely to dispose of them.
The pace of growth for sportswear firm Urban Outfitters is expected to be moderate, according to Terrie Kane, national sales manager. While Urban Outfitters maintains what Kane says is “nice department store business,” its focus will continue to be specialty store business in an effort to sustain niche appeal.
“We have to make sure we’re not all over the place so that it won’t hurt our specialty store business,” explained Kane. “Rather than trying to expand, we want to narrow down what we do. We want to focus more on who our customer is and how our brand relates to that customer. We are now at a stage that Free People [the largest of Urban Outfitters’ three labels] has come into its own as a brand.”
Citing a recent upswing in dress and skirt business after quality issues had affected sales of basics in the past two years, Kane emphasized a commitment to prints in all forms, for a multicultural, ethnic effect — with African, Asian and Latin American influences.
In terms of marketing efforts, Kane said the company would continue to rely on editorial coverage as well as placement in films or popular TV shows like “Dawson’s Creek” and “Beverly Hills 90210.”
At Dollhouse, growth is also going to be carefully paced, with an emphasis on novelty, according to Albert Shehebar, president. Distribution will continue to be oriented to specialty stores, Shehebar said.
“There is only so much that you can do on that level before you really break into the department stores. At this point, the specialty stores understand what we do and move fast,” he said.
Shehebar said spring looks would be characterized by more color, ornamentation and an emphasis on unusual, futuristic and textured fabrics. He said important items would include backless halters, body-fitted garments with nail heads, HotPants and short skirts for a “rock ‘n’ roll, motorcycle effect.” T-shirts will be embellished with rhinestone details, and unusual materials will include coated cottons with paper or wax finishes and plastic coated furs.
Shehebar said the company will beef up its licensing alliances to reinforce the Dollhouse brand. In addition to an accessories and jewelry license, Shehebar said the company was also mulling a jeans license to be completed by the middle of 2000.
“We are looking for manufacturers that understand fast nature of our business,” said Shehebar. He said he expected double-digit increases in specialty store business and cited a larger international distribution that includes Japan, Canada and Mexico.
“We’ve doubled our sales in Japan, and we will do about $2.5 million this year [in Japan],” said Shehebar. “And in Canada, we expect about a 20 percent increase.”
Shehebar said the company’s volume, excluding its licensed categories, would reach $20 million by the end of this year.
While some manufacturers reported sluggish third-quarter sales, which they largely attributed to unseasonably warm weather, they said the outlook for spring was good. Ady Gluck Frankel, president and owner of the junior firm Necessary Objects, predicted a resurgence in the bottoms business.
“The climate has become item-driven,” she said. “We are identifying and chasing the key items. We have shipped embellished and decorated bottoms. Previously, we had sold two tops for one bottom, and now it’s even and we expect that to continue.”
Gluck Frankel also pointed out that back-to-school was a disappearing phenomenon, not only because of warm weather, but because basics no longer drive the junior business. “People are not buying because they have to, but because they want to,” she said. “They buy for an occasion and because an item is fun and not because they think, ‘I really need this for school.”‘
Gluck Frankel added that daytime dressing was also likely to be characterized by novel items previously reserved for night dressing.
Important items for spring include: backless tops, tie-back tube tops, asymmetrical handkerchief tops and novelty skirts, including ruffled apron skirts, skirts with bustles and piece-patterned skirts.
Gluck Frankel said the company would operate 22 in-store shops by the middle of next year. Approximately 50 percent of the business will continue to be fueled by department store accounts, she said.
“Department stores are the base of the business. We have to be there in order to strengthen the classification. The better players there are, the stronger the team,” said Gluck Frankel.
She projected wholesale volume at more than $65 million, or the “high 60s,” by the end of this year.
Junior sportswear company Coolwear is banking on knits to drive first- and second-quarter business, according to Oded Nachmani, a partner in the company. But overall growth is expected to range between 5 and 10 percent, he said. Pointing out the fast nature of the junior market, Nachmani also stressed that newness would remain the prime focus of upcoming collections.
“We have to constantly tweak our basic items because nothing lasts in this market,” said Nachmani. He said important tops will include drawstring halters, tie-dyed T-shirts with screen prints, bleached and tie-dyed denim tops, crocheted tops with funnel sleeves, snakeskin tops, embroidered applique tops with Chinese floral motifs and colorful space-dyed tops.
“We’re going to make T-shirts exciting again,” he said.
Nachmani expects business to be driven by sweaters, which he said make up 50 percent of the company.
“We are concentrating on having the right sweater, at the right time with the right stitch. We won’t rely on suppliers for direction but develop the yarns, the dyes and the bodies ourselves from scratch,” said Nachmani.
Specialty store distribution will continue to be the focal point of the company’s plans, he said, adding, “They offer us more distribution to get the product and the name out there.”
In California, Gregg Fiene, ceo of Lola Inc., maker of XOXO, expects spring and summer bookings to be up by 70 percent. However, he had higher expectations.
Citing soft business, Fiene said he will end the year with $100 million in volume. He plans to focus on core business and will not sign any new licensing agreements in the first half.
Holly Fiene, design director, said volume at the company’s own four stores is up 50 percent. On the fashion front, XOXO is doing well with printed stretch bottoms, flood pants and HotPants in every fabrication, she said.
“It’s been solids and basics for so long, but now prints are big,” she said, citing animal prints, paisleys, Pucci prints and ditsy florals.
She added that romantic looks have been fueling business, particularly for dresses.
“Dresses are great now, especially since all of the runways featured them,” Fiene said. “They aren’t revolutionary, silhouette-wise, but they’re feminine and romantic, with lots of ruffles.”
Spring and summer bookings are ahead of last year at Hot Kiss, according to Moshe Tsabag, president. He attributes strong bookings to an increase in exporting. Hot Kiss recently started shipping to Japan and Europe.
Hot Kiss also plans to launch a denim division in February. The buzz is prints, prints, prints, ranging from ethnic to florals for spring and summer, Tsabag said. Stripes and jacquards are also important.
Annual volume is currently $35 million, and Tsabag hopes to reach $50 million by the end of next year. The company is also banking on a new $750,000 ad campaign.
Chorus Line is projecting a “flat” first half, said Andrew Cohen, president. “We think the junior dress business has lost the attention of department stores and a vast percentage of our business is done in department stores,” said Cohen. “To some extent, the branded status of junior sportswear has the focus of retailers.”
Cohen noted that overall volume will be up, however. The yearend projection is $150 million, which does not include sales from the company’s 15 to 18 outlet stores, which were closed this year. Through the first half of 2000, Cohen expects volume in all divisions to hit $80 million.
Although the All That Jazz junior dress division will be flat in the first half, Chorus Line’s new divisions — Heartbeats, better junior social occasion dresses and Allen B., a better misses’ line — will be growth areas. Chorus Line is also banking on its first major ad campaign, from March through June. The company, which is investing about $750,000 on the effort.
On the fashion front, feminine looks are key for spring and summer, according to Sharon Ferguson, president of Heartbeats and All That Jazz dresses. Novelty treatments include ruffles and ribbon pull-throughs and prints.
Crinkle chiffon Pucci prints, tonal florals and paisleys are among the top prints. Fabrications are also important and include sheer matte jersey, micro polyester and printed stretch twill.
Chorus Line is also following the Raj influences with novelty treatments such as trims, mirrors and ribbons.
The prom/special occasion dress business is driven by a range of looks, including hand-trimmed satins with and fur boa tube tops paired with sequined ball skirts.
Making a slow comeback, Rampage Clothing Co., which emerged from bankruptcy at the beginning of the year and launched an aggressive licensing program, is projecting volume of $100 million by the end of this year and $130 million by July, according to Della Olsher, vice president of marketing and licensing.
Rampage, which produces sportswear and dresses in-house, has a vigorous licensing program under way. The firm has 12 licensed product categories, including outerwear, handbags and small leather goods, activewear and girls’ dresses, innerwear, men’s wear and footwear.
Rampage plans to sign a licensing agreement with Worldwide Apparel to launch a denim line under the R-Wear label for back-to-school next year. The company is also developing its R-Wear brand of casual sportswear, which is carried in Sears and Mervyn’s.
Advertising vehicles will include a new Web site and a new campaign. The site was launched in November and offers sportswear and intimate apparel, Olsher said. “We expect e-commerce to be a big part of our business in the next four to five years,” she added.