ALGO HAS ITS EYE ON SHOPS IN U.S. STORES
Byline: Paul French
TORONTO — The Algo Group, one of Canada’s largest apparel makers, is ready to send another export to the U.S. But this time, it isn’t a collection of dresses; it’s a retailing concept.
The Montreal-based diversified fashion company is rolling out an in-store shop program to department stores across Canada and is looking for an American partner to expand the idea into this country.
Algo is also expanding its business boundaries by looking toward South America to develop textiles sales and further penetrate Europe and the Mideast in the dress market.
Jack Wiltzer, president of the publicly traded company, said the U.S. continues to be its main focus and is where it does 40 percent of its $145 million ($200 million Canadian) business.
“Our strength has always been in social occasion dresses, and we’ve really gone after the major U.S retailers,” he said. Algo has four dress lines in the U.S. that sell at moderate-to-better prices: Algo U.S., En Francais by Huey Waltzer, JS Collections and Lori Ann.
Children’s wear is represented by the Robin (USA) and Casual Time labels, while Hamil USA and Hamil America make up the textiles division. The three are roughly the same size in the corporate profile in terms of sales, with a small men’s sportswear division operating in Canada.
Wiltzer said the in-store shop concept is about building strategic alliances with retail customers. Algo has introduced seven boutiques in The Bay and T. Eaton department stores, with 20 slated to open by yearend.
“We’ve defined the concept as sharing the risk-reward responsibility, so when we go in, it’s not just taking an order and shipping,” he said. “It means planning the physical space and helping to manage inventory.”
To facilitate the setup, Algo has brought a retail merchandise manager on staff.
“We have to work around some logistical problems, like getting goods directly into the store without having to go through a distribution center, so we can really jump on reorders,” Wiltzer explained.
Eva Yang manages Algo’s boutique in The Bay’s flagship store in downtown Toronto. It was the first to open, late last year, and she said traffic has been building by word of mouth.
“Many of the dresses are used by bridesmaids and mothers of the bride, so they get seen, which helps build sales,” she said.
The boutique is outfitted with chandeliers and a divan and encompasses about 700 square feet. Yang, who is an Algo staffer, said that unlike neighboring boutiques in The Bay, such as Liz Claiborne and Jones New York, her merchandise doesn’t ever go on sale.
“If it doesn’t sell,” she said, “we ship it back to the plant.”
At The Bay, Algo’s dresses retail from $87 to $235 ($120 Canadian to $325 Canadian). Fabrics include nylon, Lycra spandex and taffeta.
In the U.S., Algo sells to Dillard’s, Saks Fifth Avenue, Nordstrom and Federated Department Stores. The company is working with a consultant to find an American retailer at which to introduce the boutique concept. The choice, Wiltzer feels, will likely be one of the company’s current customers.
The En Francais label is not available in Canada and is manufactured in New York, while the other lines are produced in Quebec. Wiltzer is quick to point out that Canada’s lower-valued currency, at about 74 U.S. cents to the Canadian dollar, is an advantage when exporting to the American market.
However, he added,: “You can’t exist solely on a price advantage. You better have the right product, otherwise you won’t succeed, especially in the social occasion category. You’re selling fashion and style — it’s not a commodity, so price is not the whole story.”
Algo has been selling in Russia for four years. It’s a market for which it has high hopes. But, the Mideast is where the action is right now, Wistzer said.
“A recent Dubai trade show, based on a one-show performance, generated the highest sales of any show we attend all year,” he noted, noting the market for midpriced synthetic dresses is strong there, but Algo is careful not to sell leftovers from its North American sales.
“The fashion awareness is substantial,” he said. “You can’t go to these markets and sell your discards or your mistakes. If you travel with that attitude, you’re not going to do business.”