OFF-PRICE VENDORS TRY A NEW TACK

Byline: Kristi Ellis

LAS VEGAS — The off-price industry is overhauling its image.
As business prospers, players are shifting strategies to enhance credibility and legitimacy of the segment, according to vendors.
“This business is essential,” said George Jage, executive vice president of the Off-Price Specialist show, which took place in Las Vegas Aug. 27-31. “Every major hard and soft goods company needs a secondary market where manufacturers can convert excess inventory and problems into cash.
“We feel that the Off-Price show has taken jobbing from being a shady business to being a legitimate business.”
On-the-spot business was steady at the show, which overlapped with the MAGIC and WWDMAGIC trade shows. In fact, the business is so strong that show organizers have had to expand square footage to accommodate the growing exhibitor base.
The show took up 132,000 square feet at the Sahara Hotel and Casino, compared with 120,000 square feet last year, and featured 350 exhibitors in 600 booths, an increase from 280 last year. It attracted more than 8,000 buyers.
Retailers included major off-price chains, such as Marmaxx (Marshalls and T.J. Maxx), Ross Stores, Kmart and Wal-Mart, specialty chains and mom-and-pop stores, all on the prowl for discounted merchandise, ranging from 30 to 60 percent off regular wholesale.
In February 1995, Ed Bernard, president and owner of Bermo Enterprises, and Bill Jage, George Jage’s father, who at the time was owner and president of RJDJ Inc., created the first Off-Price Specialist show. It took place at the Debbie Reynolds Hotel in Las Vegas. The Las Vegas editions are held twice a year, in February and in August. Based on the growth of these shows, management decided to launch a New York Off-Price show in October 1998. The next New York show will be held Oct.18-20 at the Jacob K. Javits Convention Center (see story, page 12).
Much of the growth can be credited to the wholesale distributors who have focused on full runs with all sizes and colors and ignore broken lots and leftovers.
Wholesale discounters/jobbers conduct business in several ways. One method is buying large, single-purchase inventories from bankrupt companies, discontinued brands or discontinued licenses. “Mill-relation” jobbers develop special relationships with mills to dispose of overruns and irregular merchandise. There are also companies that buy licensed sportswear and deal in off-price goods in a specific category, and still others who act as overseas buyers and look for factory cancellations or retail private label cancellations in the Pacific Rim or Europe.
Despite efforts to cultivate a more traditional image, most exhibitors are reluctant to name the brands on the closeouts they offer. A buyer can find most major labels at a price at the show, including, Nike, Polo, Adidas, Esprit de Corp., Calvin Klein, Union Bay, Max Studio, Bisou Jeans and Armani. Anonymity is still the name of the game.
Several companies, however, have raised the level of credibility in the business by offering full runs in all sizes and colors.
Bill Jage, who is now president and chief executive officer of the Off-Price show, estimated that over $150 million in orders were written at last year’s August show. In the off-price business, that is no surprise — one exhibitor reportedly wrote $7 million in one order at the show last year, he said.
Michael Reiss, president of General Sales Co., based in St. Louis, said he sold between 100,000 and 200,000 units at the show. He added that he was showing 900 stockkeeping units.
“This show is great,” Reiss said. “We are up by 5 to 10 percent at every [edition].”
He noted that he did well with Polarfleece vests and jackets, stretch capris, boxy sweaters and three-quarter-length knit fitted tops and outerwear.
His strongest categories are misses’ and plus-sizes, and he noted that children’s and men’s are growing, owing to the cross-traffic from MAGIC.
Jet Apparel Group, based in Costa Mesa, Calif., offered products in the juniors, misses’, men’s, children’s and accessories categories.
Larry Yarchever, vice president and national sales manager, said that his strongest categories are misses’ and men’s.
“Embellished jeans are really happening,” said Yarchever, adding that misses’ denim is “really hot.”
Yarchever said that he primarily sold fall ’99, though retailers were also ordering spring, which Jet packs and holds for 60 to 90 days.
He said that 10 percent of his annual revenue comes from the Off-Price show, noting that he has 1.5 million to two million units in stock at all times.
Dennis Sloves, a principal in EasyWear International, which is based in New York and El Paso, Tex., said that he deals in large lots of misses’ apparel.
He said carpenter pants were really popular at the show. Sloves sold over 100,000 units at the show. He noted that basic jeans were hard to sell because most buyers want the fashion items.
Coordinated sportswear in misses’ and plus-sizes was a hit for Bargain City Clothing Corp. out of Spartanburg, S.C.
“People are looking at pricing at this show — that is the key,” said Curt Wilson, president of Bargain City. He noted that knits, sweaters and dresses were also popular items. His prices average $3 and up for tops and $5 and up for sweaters.
Marla Minns, a divisional head with One Price Clothing Co., the Greenville, S.C.-based off-price chain with 625 stores, said she picked up a few key outerwear items at the show.
“We are always looking for bargains and labels,” Minns said.
Her key purchases were on bubble vests and jackets as well as Polarfleece items.
Mary Collier, owner of Courtyard Apparel in Yuma, Ariz., placed 12 orders at the show.
She picked up casual denim from George Vine Associates, harem pants from Fashion Fuse Inc., and swimsuits from Bounty Trading-Bobaloo Knits.
“I sell casual resortwear to retirees,” said Collier. “I am looking for things like a glitzy denim shirt that my customers can wear to happy hour.
“Older women are not into labels,” she said. “They like mostly durable, easy-care clothing.”
Gail Paske, owner of 101 Board Sports in San Diego, said that she was looking for first quality holiday apparel, particularly tops, sweaters and pants.
She said that she used the show to pick up new resources in the moderate to better categories.
“We are a surf shop,” she said, “so we are looking for surf labels.”