STORES GEAR FOR SPACE CRUNCH
Byline: Karyn Monget
NEW YORK — Power brands are out to gobble up space in innerwear departments, and some resources will most likely join the homeless ranks, say retailers.
While there traditionally have been designer names in intimate apparel, the issue of retail space is reaching a crescendo this year with the introduction of several new power brands, each jockeying for in-store shops or special display areas.
The names are coming not only from ready-to-wear but from Hollywood legend, aiming at a piece of the highly profitable innerwear business. It’s a business that rang up sales of $10 billion in 1996, up from $9.1 billion in 1995, according to NPD research marketing group.
Making their debut for spring are the Ralph Lauren Underwear line from Sara Lee Corp. and Halston Intimates sleepwear produced in-house by TTI. Late last fall Warnaco Group introduced Marilyn Monroe by Warner’s. These new names, all looking for special places on the intimate apparel floor, join a parade that already includes such marquee names as Warnaco’s Calvin Klein Underwear and Wacoal America’s Donna Karan Intimates.
Even underwear brands long associated with middle America are getting in on the shop act. Jockey for Her, which is produced by Jockey International, says it plans to open in-store shops at nationwide this year. The first shop opened at Carson Pirie Scott in Chicago in December.
A key question is whether retailers will embrace the idea of in-store shops — which can take up huge amounts of space — just for one brand. Each brand demands individual consideration, say retailers, and they’re considering options other than permanent in-store shops with individualized fixturing and point-of-sale materials. There are so-called “soft” shops, which can be merchandised seasonally by brand or classification. The brand can also simply get a small display area, or just be mixed into the main merchandise assortments.
Whatever the decision, floor space that has traditionally been the domain of long-established brands and specialty labels is expected to be under increasing pressure — and in some cases, retailers are predicting a falling out of resources. For some stores, though, there could be an expansion of overall intimate apparel space.
Michael Gould, chairman and chief executive officer of Bloomingdale’s, put it this way: “Intimate apparel is a high margin business, and we certainly need to give it more space. I think designer names in intimates are very important. Look at the Donna Karan, Calvin Klein and Natori [innerwear] shops. They do a great job in highlighting the merchandise.”
He added, however, there are no specific plans for such expansion at the moment, although he did mention the firm’s new California stores as units where the firm is thinking about more innerwear space.
In-store shops for key innerwear labels at Bloomingdale’s flagship here include a 1,000-square-foot shop for Calvin Klein Underwear, a 350-square-foot shop for Donna Karan Intimates, and 750 square feet for Natori, a long- established specialist in innerwear.
The designer goods — upscale bras and panties that have a signature look such as Calvin Klein’s logoed underwear — are particularly appealing to merchants because of the excitement and glamour associated with a top designer. It’s generally a full-price business that has limited distribution to a retail group’s top-tier stores.
While some designer bras and panties don’t generate the volume business of basic commodities, sales per square foot can be impressive, especially if it’s a high-profile name crossing over from the ready-to-wear field — an estimated $350 to $500 per square foot, according to industry estimates.
Space for the in-store shops usually average around 350 square feet, and can go as large as 2,400 square feet for power brands, such as the Calvin Klein Underwear shop at Macy’s Herald Square.
When it comes to getting dedicated space, Calvin Klein Underwear is the leader with 17 in-store shops at major stores — 12 of which feature permanent fixturing and point-of-sale materials, while five are the “soft” shop variety. This year, Warnaco plans to open 25 more shops with permanent fixtures and graphics, and between 200-to-300 display areas within innerwear departments.
“The store shops establish our key doors as headquarters for our product in the consumer’s mind,” said Terri Speiser, vice president of sales for Warnaco’s Calvin Klein innerwear business.
Carmine Porcelli, managing director of Halston International at TTI, said, “There’s very tight space in intimate apparel departments, and getting real real estate is difficult.”
Porcelli said that the company hopes to do designer areas with “soft fixturing and graphics,” but he had no forecast as to how many there will eventually be.
Numbers are also unclear for the Lauren and Monroe collections, although Linda J. Wachner, Warnaco chairman, president and ceo, has stated that the line is expected to do $25 million in its first year. As for Lauren, a Lauren spokeswoman said “major buying groups” are all doing in-store shops.
But no matter how large the department, space appears to be at a premium — even at the Macy’s Herald Square flagship, where the sprawling third-floor innerwear department is 30,000 square feet.
Robin Suvoy, vice president and divisional merchandise manager of intimate apparel at Macy’s East, assessed the tight space situation. “Is there room for more designer names and in-store shops? Not really, unless there’s additional real estate, and that’s not in the plans for us right now,” she said.
“I would say there will be a falling out of labels, and it will be a tough step in the door at this point,” Suvoy said.
Nevertheless, in July, Suvoy said “hard shops” with fixturing for Donna Karan Intimates and Ralph Lauren Underwear will be set up at the flagship.
“Designer names are an important part of our [innerwear] business,” Suvoy continued. “Distribution is limited and it’s full-price business. It gives a customer a reason to come to a department store — particularly to my top doors which do the majority of my designer business.”
The store also took on the Marilyn Monroe line with a soft shop opened in December.
Suvoy added that “value-driven” shops with fixtures will be opened in July in 14 Macy units for INC, a private label line. INC sleepwear was introduced in 1996 by Macy’s parent, Federated.
“INC has been enormously successful in intimate apparel, and we believe we’ve established a very strong INC customer,” Suvoy said. “A customer may want to buy a designer product, but she’s still not convinced she should pay a higher price for it.”
And despite the push on designer, the four biggest-selling national brands at Macy’s continue to be Warner’s, Olga, Maidenform and Bali, she said.
“A lot depends on how much particular designers advertise on their own,” said Laurie Black, divisional merchandise manager of intimate apparel at Nordstrom, Seattle. “Calvin Klein is so hot because the ads are so hot.”
But while designer names are in demand at Nordstrom — the chain currently sells innerwear by Donna Karan Intimates and Calvin Klein and plans to carry the Ralph Lauren and Halston labels — Nordstrom doesn’t showcase the goods in in-store shops, Black said.
“We never do vendor fixture concepts…. In essence, the brands are promoted by merchandising them on the selling floor,” she said.
“We don’t believe in designer shops — we promote Jacobson’s, not trends,” said Louise Hefka, buyer of sleepwear and loungewear at Jacobson’s Stores, Jackson, Mich.
However, Hefka noted that “More designer names will be a part of our assortments this year. These labels, though, will rise and fall on the strength of their lines — not because of their name.”
Jacobson’s currently sells Calvin Klein, Donna Karan Intimates and Natori innerwear, she said, noting, “We are hoping that Ralph Lauren will do as well for us.” She added that the Halston label is being considered.
Rosemarie Marranco, buyer of intimate apparel at Jenns, a four-unit specialty chain based in Amherst, N.Y., said, “I will not do Calvin Klein [innerwear] — because I don’t want to have what department stores have. My Wacoal business is wonderful, Felina business is good, and we’ll be featuring Donna Karan Intimates for the first time in this region this spring. Donna should be great for me.”
Shop concepts for innerwear are not used at Jenns.