UPPER MODERATE FAILS TO MEET EXPECTATIONS
Byline: Anne D’Innocenzio
NEW YORK — Only a year ago, the upper-moderate zone was trumpeted as a golden opportunity to invigorate lackluster moderate sportswear at department stores.
By offering such updated fashions as slim-leg pants and zip-front jackets at prices below better, apparel executives reasoned they could lure shoppers in their 20s and early 30s away from The Limited and Gap.
That optimism has subsided.
After getting a cool reaction from consumers, some of these new lines have been forced to close. They include Francine B., a division of Francine Browner Inc.; Union Square, Counterpart’s upper-moderate offering, and Notables, from Koret of California. All three lines closed during the spring season. Componix, which was acquired by Teddi Apparel in 1995 and was redefined as an upper-moderate resource, stopped shipping last fall.
Halston Lifestyles, licensed by Tropic Tex International — a line that was supposed to give the movement much clout — is now moving to the better sportswear departments for next spring, after company officials discovered its suede pants and H-logo shirts were too pricy for the moderate customer.
And Emma James, Liz Claiborne’s upper-moderate line that made its debut in February, is being made over; prices are being reduced, and the focus is shifting from a collection to an item-driven line. Retail sales of Emma James, which had a lukewarm beginning, are picking up, according to buyers.
Other upper-moderate labels such as Nouveaux from Requirements and Jou Jou Journey, the updated line from Jou Jou Inc., are hanging in, and company executives are changing their lines dramatically to focus on the items business.
What went wrong?
Many executives say there simply wasn’t a need for these line. They reasoned that consumers who prefer updated clothes would rather buy better-priced resources such as Liz Claiborne and Jones Apparel on sale, since those labels offer more cachet than the unknown new names.
They also pointed to such formidable competition as Jones Apparel’s Rena Rowan of Saville, a low-better-priced line, which has sharpened its fashion in the past six months.
Such a scenario has forced department stores, which had big plans to stock the area with brand names, to develop their own private label business in moderate.
“I was very optimistic about the whole area, but the retailing environment was a lot tougher than expected,” said Gary Fink, corporate buyer at Mercantile Stores, which realigned its floor space to make room for such upper-moderate resources as Componix, starting for fall ’96. It is taking a different tack this season. It is building its private label brand, Signature Expression, an item-oriented line, and keeping Emma James, which has improved its sell-throughs over the past month or two.
“[The upper-moderate tier] is a more item-oriented business, not a collection business,” Fink said. He added that consumers were simply just buying better resources on sale, rejecting the upper-moderate labels.
Fink said he believes Mercantile’s private label, which offers good margins, should be competitive with what is being offered at Limited and Gap. Signature Expressions offers linen pants at $48 retail and structured jackets at $89.
“It is not running the way it should,” said Marty Axman, president of Requirements, whose Nouveaux line — launched last fall — posted first-year sales of $10 million, a bit less than what was expected. The line is priced 10 percent above the traditional sportswear resource that bears the company name.
After getting a poor response from consumers, Jou Jou Journey, which was launched in seven major accounts during spring 1996, is being changed dramatically. The line, which had been collection-oriented and offered 35 styles, has been reduced considerably. For this fall, Jou Jou Journey offers five styles, 65 percent of which are marketed under the store’s private label, according to Bob Acampora, executive vice president of Jou Jou Inc.
The remainder, under the Jou Jou Journey name, is on a cut-to-order basis with store accounts.
The five styles are broomstick skirts and dresses, casual denim pants, shortalls and pajama pants, he said.
“We will not stock any inventory in Jou Jou Journey,” Acampora said, adding that he has “enough on his plate.” The company also markets the junior line Jou Jou; Dollhouse, its edgy streetwear line, and Jou Jou Kids.
Other firms are dumping the upper-moderate area entirely in favor of better.
Take Francine Browner, for example, which came out with Francine B. two years ago. Now the company, which also markets contemporary powerhouse BCBG; To the Max, a junior line, and Parallel, a contemporary line, is turning to Maxime, its new better misses’ knitwear resource that was unveiled in stores in June.
“[In the upper-moderate tier] it was very difficult to hit those price points that retailers were looking for,” said Marily Hikita, director of merchandising and design for Maxime and To the Max.
“The buyers always wanted us to be lower,” she continued. “I think, in general, department stores were struggling to find what direction they wanted to go.
“They were having difficulty formulating their strategy,” she said.
The resource did get into major department stores, but sales were sluggish, she said.
As for Maxime, cardigans wholesale from $66 to $74, while pants wholesale from $49 to $74.
Holly Arnesen, sales manager at Teddi Apparel, noted the company is sticking to the traditional moderate sportswear market, though it is offering updated looks to lure the woman in her 40s. Teddi expects to wind up with $120 million in sales by the end of the year.
“Staying in the upper-moderate area just wasn’t worth it,” she said.
“The quality of the Componix line was not up to the standards we had hoped. We had a lot of missed deliveries. Items such as vests and mock turtlenecks were selling, but overall, the performance was not stellar,” she noted.
Carmine Porcelli, managing director at Halston International said it was clear to him that the upper-moderate zone was not right for the Halston lifestyle line soon after it hit the stores for spring.
“Whenever we were adjacent to better, it did well, but when it wasn’t, it did not do well,” he said.
Porcelli said he began testing it in the better area with Belks and Carson Pirie Scott during the late spring season.
For spring ’98, the line’s prices have moved up a bit. Pants now retail from $78 to $88, compared with $58 to $68 from the year-ago period.
Moving to better hasn’t been so easy, either, Porcelli said.
“Whenever you make a change, there is always that sense of resistance from the stores, who were building it as an updated line,” he said. “But it was never that customer.”