BANKING ON BARGAIN HUNTERS
OFF-PRICERS BASK IN A BUOYANT MARKET

Byline: Alison Maxwell

The off-price industry is hot.
The economy keeps cruising, unemployment is low and wages are rising, but people still like a bargain. So consumers are heading to discount stores and off-price retailers to get the biggest bang for their buck.
Vendors heading to the October Off-Price Specialist Show in New York hope that this phenomenon, coupled with a change in venue for the show, as well as concurrent apparel shows, will lure more buyers and increase sales.
“I’m anticipating the best show ever in New York,” gushed Ed Bernard, owner of Michigan-based Bermo Industries.
“This show is an important venue to the off-price retailers, who are starting to go to more shows,” said Michael Reiss, president of the General Sales Co., an off-price distributor of women’s branded apparel. “The show makes it a lot easier to bring everyone together. It gives everyone a chance to shop everybody at once and to compare.”
October’s show will be the fourth time the Off-Price Specialist Show hits New York, but its inaugural run in the Jacob K. Javits Convention Center.
Robert Bognar, marketing director for the show, said he expects about 110 vendors and 2,500 buyers. Attendance could “easily double,” he said, because the International Fashion Boutique Show, the Vibe Style Show, the International Kids’ Fashion Show and the International Fashion Fabric Show are all occurring at the Javits Center simultaneously.
Apparel wholesalers and jobbers reported spectacular sales at August’s Off-Price Specialist Show in Las Vegas and aren’t expecting anything less in New York.
“I think the turnover will be great,” said Henry Driz, manager of Benny’s Wholesale, which sells branded dresses and pants and skirt sets at 50 to 80 percent off wholesale prices. “With the year 2000 coming up, stores will need more goods than before. The Vegas show turnaround was 30 percent above normal, so New York will probably match that.”
Lisa Fethkenher, sales manager at Arizona-based Arielle J., said she expects sales to top last year’s figures because “word is spreading” about the show.
“The show is gaining tremendous momentum,” agreed Ralph Maya, president of S. Maya & Sons Inc. “If we do our job in getting the merchandise, we’ll have good sales.”
“As the show goes on, it draws more people,” said Lance Huberman, an owner of the Resource Apparel Group. “It takes time, but now that this is the fourth show, it should be starting to hit people and influence them to come.”
Off-price vendors expect buyers to be stocking up on last-minute holiday needs and early spring items.
Bernard said he anticipates about half of his sales to be immediate needs and half spring needs. “Smaller retailers will be shopping aggressively for spring, and larger retailers may be trying to fill holiday holes,” he said.
“In Las Vegas, people were buying for the holiday, so the New York show will be another way to help with last-minute holiday buying and early spring buying,” Fethkenher said, referring to the western edition of the show, held last month (see story on page 16).
“It’s really an important show,” said Reiss. “We’ll do a lot of immediate fill-in for the rest of fall and Christmas, and a lot of customers will book early deals on spring goods.”
Still, there’s no pinpointing which items will be big sellers.
Driz predicted that long-sleeved items would sell well, while Fethkenher said holiday dresses for millennium would be hot. Bernard is banking on Polarfleece, velour and sweaters to be big sellers for fall, and capri pants to remain popular for spring.
“Unfortunately, I can’t tell you that button-down blue shirts are the thing,” explained Shelley Needleman, a salesman with Bounty Trading. “In the closeout business, it’s price, price and more price.”
The fact that major off-price retailers like Loehmann’s and Filene’s Basement have filed for bankruptcy didn’t faze most wholesalers and jobbers. In fact, they agreed that the Chapter 11 filings could be better for business.
“There are always other people out there that maybe aren’t as big, but can do as much business,” Fethkenher said. “We’ll see. Maybe other stores will be buying more now.”
Because Filene’s Basement and Loehmann’s have already received bankruptcy-court approval and a debtor-in-possession package, off-price vendors said they would be happy to ship to them.
“We’re very eager to sell to companies like those because their ability to pay their bills is much better,” Bermo’s Bernard said.
“We’re still doing business with Filene’s [Basement] because this is just a reorganization,” explained Joan Owens, sales manager at Diversified Inventory Solutions, which sells the Express and Lane Bryant brands. “I don’t see any downside to it.”
As off-price merchandise sales boom, off-price specialists are optimistic about the future of their industry.
“The future holds continuous growth for us,” Fethkenher said. “It’s an area that everyone is gravitating toward. Even if they are not off-price retailers, they realize they can get good merchandise for good prices.”
Reiss said the industry’s future is “bright” because more stores are using off-price merchandise to increase margins and run specials.
Industry competition and vendor credibility are the only clouds on the horizon.
“Undoubtedly, the off-price industry is tremendous,” Maya explained. “The only problem I see is competition. Instead of selling to us, the regular manufacturers are looking to sell to the off-price stores directly.”
“The off-price industry is the way of the future,” Needleman said. “The biggest problem is sourcing inventory. It’s a matter of being the first person there at a closeout. It’s a game 100 percent.”
Bernard said he is concerned with credibility, because vendors often show products they don’t own and eventually are unable to ship.
“Retailers have to fill their racks with product, and if they can’t count on shipping it, they don’t want to order product from you,” he said. “For the future of the off-price industry, we must stay credible and maintain the positive that is happening now in the industry. We don’t want to get a black mark against us.”