U.S. FIRMS THRIVE WITH EXPORTS
Byline: Anne D’Innocenzio
NEW YORK — With hot pockets in the Middle East and Asia, sportswear firms, particularly contemporary resources such as Laundry, Kenar Enterprises, ABS, BCBG by Max Azria and Liz Claiborne Inc. are staking a claim in overseas markets.
The reason is simple: With increasing consolidation, sportswear executives view foreign markets as essential to expanding their businesses. Contemporary firms, in particular, seem to be faring well overseas.
“Selling overseas is the future,” said Kenneth Zimmerman, president of Kenar Enterprises, which aims to develop its international business to 30 percent of volume from the current 5 percent. “You can’t grow unless you go global.”
As part of its international strategy, Kenar is opening freestanding franchise stores, with the emphasis on Brazil for now. Eight months ago, it opened a unit in Sao Paolo, with plans to open a unit in Rio de Janeiro and Brazilia this fall. Kenar plans to open a store in Bangkok on Aug. 1. For fall 1997 or spring 1998, the firm will be targeting Amsterdam, and the company is looking into other “secondary cities,” such as Brussels.
“Big cities, such as Paris, are oversaturated, so we are looking at places that need stores,” said Zimmerman.
The stores are about 1,800 square feet.
Zimmerman noted that he doesn’t alter the designs for overseas markets, except when it comes to colors.
“Consumers overseas seem to want the styles that Americans are wearing,” he said.
Kenar also sells directly to Canada, Japan, Singapore and United Arab Emirates.
Kenar has taken an interesting marketing approach, advertising in certain countries at least a year before its fashions are sold there. For instance, for the past few years, Kenar has been advertising in Italy in such magazines as Italian Vogue, though its goods are not even on retailers’ shelves. It took the same approach in Brazil.
“We want to create a demand for the product, so that when we start selling the clothes, people will already know about us,” said Zimmerman.
He noted that South America and Third World countries present the biggest growth opportunities.
“With shrinkage and mergers among all the U.S. stores, we are looking for more opportunities outside the country,” said Lloyd Singer, president of ABS, which sells its line overseas through agents. “We are exploring all countries.”
Less than 5 percent of its business is from overseas, but Singer aims to increase that figure dramatically over the next few years. He noted that the number of overseas accounts has picked up in the past year because of the company’s return to its contemporary roots from a foray into the bridge market. He said the fashions appear to be more appealing, offering trendier fashions at 30 percent less.
“The hot areas of growth are Asia, such as Singapore and Hong Kong, and the Middle East, such as Kuwait,” Singer said.
ABS is also exploring attendance at trade shows in such countries as Italy, Germany and France to increase its exposure.
About 5 percent of Laundry’s business is from overseas accounts, coming from Europe, the Far East, including Singapore, and Japan, and the most recent area — the Middle East. Business is done through agents. Top accounts include Selfridges in London and Liverpool in Mexico, according to Mark Mendelson, executive vice president of sales and marketing.
Europe is the toughest territory in which to sell, he said.
“European buyers come here only twice a year,” said Mendelson. “We ship monthly, and they want to see three months [of deliveries] at a time, which we cannot do.”
In particular, Mendelson believes that he is filling a void in the Far East, which is saturated with designer labels and mass lines, but doesn’t have much in between.
Its overseas business is about $5 million, but Mendelson projects foreign sales will increase to $15 million in a few years.
About 10 percent of Leon Max’s current $60 million in wholesale/retail volume is done overseas, but owner and president Leon Max would like that figure to be 50 percent. It operates eight licensed freestanding stores in Asia, including Korea and China. It is also looking for a licensing partner in Japan. Leon Max also sells to department stores and specialty shops in Asia.
Max noted that another area of growth is Eastern Europe.
“We are definitely living in a smaller world, and it is only logical to extend distribution to other countries,” he said. “There is a great fascination over there with American pop culture.”
He noted that contemporary fashions seem to be in sync with what consumers overseas want.
“Stores overseas don’t want safe missy looks — it is too prevalent over there,” said Max. “‘They want fast fashion. I think contemporary fashions bring a different point of view.”
He noted that contemporary fashions, which are cut closer to the body than misses’ clothes, generally do well in Asia.
BCBG by Max Azria is also expanding its international business and plans flagships in London, Paris and Milan. Designer and owner Azria recently bought back 10 freestanding BCBG stores, all in Japan, from Suzuya Co. Ltd., noting that he wanted more control.
