SPORTSWEAR: STAYING ALIVE
THE INDUSTRY HAS BEEN HIT AT ALL PRICE POINTS BY RETAIL CONSOLIDATIONS AND SLUGGISH SALES. FOR 1996, MAKERS HAVE PUT INTO MOTION EXPANSION STRATEGIES INCLUDING RETAIL SHOPS, NEW LINES, MORE LICENSING AND A GLOBAL AGENDA. HERE ARE INDIVIDUAL REPORTS ON THE DESIGNER AND BRIDGE, BETTER, MODERATE AND KNITWEAR MARKETS.
Byline: Janet Ozzard
NEW YORK — As retail continues to shift, manufacturers in the bridge and designer markets look for new territories for expansion.
Not everyone has the same approach. For Ralph Lauren, it means building his newly retrieved women’s business. For Isaac Mizrahi, it’s a new secondary line. And for Calvin Klein, it’s an aggressive build of his business in Europe.
For others, it can mean anything from new divisions to new licensees. The main thing seems to be finding ways to expand.
With the uncertainty both in consumer buying patterns and in the retail community, manufacturers’ predictions for next year’s business vary. Some, like Ron Frasch of Escada, are looking for “significant double-digit growth,” while others, such as Tahari’s Tom Murry, are predicting a “conservative” 20 to 25 percent growth.
“There’s not a lot of strategy in terms of product,” said Stephen Ruzow, president of The Donna Karan Co. “But there will be a lot in terms of continuing to improve deliveries and continuing to increase the international business, which will be 30 percent of our total volume, or $200 million out of $600 million in total sales.”
Overall, Ruzow said, the company had “an incredible year.” He is projecting a 20 percent increase for the whole company.
One strategy for Donna Karan will be expansion of freestanding stores, mostly in Europe. The stores, said Ruzow, “reinforce our presence and clearly define our identity in the customer’s mind.”
“The London DKNY store will do 6.7 million pounds in its first full year, or about $10 million,” he said. “We will have 42 stores at the end of this year, and probably open another 10 next year.”
For Lauren, the retrieval of his women’s wear license from Bidermann Industries lit a fire under his women’s business. He created a new company to build that business, and signed licenses for jeanswear and a better-price sportswear line in rapid succession — moves calculated to bring the women’s business up to speed with the $550 million men’s Polo operation.
Next year will be occupied with planning launches, ad campaigns and store strategies, said Cheryl Sterling, president of Ralph Lauren Womenswear.
“We think we’re going to see major increases,” said Sterling. “We’re building more in-store shops for all the labels, and we’ll further strengthen our relationships with stores through events and advertising. We’re still currently forming the plans for the total package.”
Mizrahi, too, is venturing into the lower-price arena with his new Isaac line, which will debut this spring — although major stores have already given the line an enthusiastic response.
Jennifer Peck, president of Isaac Mizrahi, said the company had an 18 percent increase in collection sales this year, boosted by an additional delivery in each of the fall and spring seasons.
“We also enhanced the quality of the collection by producing a portion of the line in Italy,” said Peck.
With more European expansion, and new shops in Barneys New York stores here and in Los Angeles, Peck said she is planning a 30 percent increase for the collection line next year.
The secondary Isaac line, which will launch for spring selling, has 22 hard and soft in-store shops at various accounts, said Peck, which range in size from 400 to 1,100 square feet.
“We’ve also planned an extensive marketing and national ad campaign,” to support the new line, she said. “We’ll be in catalogs, and we’re doing mailers and our own video as well. The new brand and the focus of the collection line gives us a great opportunity in licensing additional products here and in the Far East.”
Calvin Klein generated plenty of publicity for his name this year through controversial ad campaigns for his CK jeans and men’s underwear. He also emphasized his European business by signing manufacturing and distribution licenses for CK jeanswear and sportswear.
“We believe there’s an increasing penetration in each category,” said Frasch, president and chief executive officer of Escada USA, which has the Escada Margaretha Ley, Escada Couture, Escada Sport, Apriori and Laurel apparel lines.
“This is a time to be opportunistic and capture market share,” he said. “It’s also a
time for investment in individual stores, in some doors within chains. We realize we can’t be everywhere, and we’ve spent the last year being very focused and specific so we can maximize productivity. I think companies fall down on implementation, and forget that deliveries and product quality are the backbone of business.”
New opportunities aren’t limited to big names. At Todd Oldham, Tony Longoria, the designer’s business partner, said the Times Seven bridge label and the new jeanswear, which is licensed to Sun Apparel, will be “the powerhouses” next year.
The activity in the lower-price area doesn’t mean designers are abandoning their higher-price customers. In fact, with a resurgence in the luxury goods market — as evidenced by record-breaking trunk shows and a healthy designer business around the country — the big names continue to woo the more affluent shopper.
“Are we delivering too early?” asked Frasch, whose company has racked up $1 million-plus trunk shows this year. “Yes, we’re servicing the trunk shows, but what about day-to-day business? Regardless of how good a year is, there are still too many damn markdowns. For me, and for my company, there are no sacred cows.”
“Donna opened early,” said Karan’s Ruzow. “She opened fall and pre-fall in February, and delivered spring in September. That gave us six to eight weeks of full-price selling, which greatly helped the retailer and also helped their confidence in our ability to deliver on time.”
And Ruzow said that with Mary Wong at the helm, DKNY, which has always been one of bridge’s best-known names, will regain its position.
“Design has always been a strength for DKNY, but since Mary Wong joined us this year, she’s balanced design with the wear-to-work clothes,” said Ruzow. “I think we’d abdicated that business to Ellen Tracy, Anne Klein II and Emanuel, but we got it back with a roar this fall. DKNY women’s did $250 million and it will do $300 million next year. That’s just women’s apparel and jeans, not accessories. It set the pace for the whole company.”
In fact, bridge was a generally healthy category this year, with some of the big names racking up double-digit increases and launching new divisions such as Dana B. & Karen from Dana Buchman and a petites line from Emanuel/Emanuel Ungaro.
“A lot of opportunities made themselves visible in 1995,” said Gail Cook, president of Dana Buchman, a Liz Claiborne Inc. unit. “There was a lot of younger, sexier styling, such as sheer looks and halters, which were very successful.”
Dana Buchman did about $113 million at wholesale this year, and is predicting growth of about 20 percent in 1996.
But while bridge’s strongest labels continue to grow, Cook acknowledged that the retailers aren’t making it easy.
“The demands change all the time, and we always have to do more,” said Cook in reference to stores’ demands. “Not that I like it, but that’s the reality.”
Emanuel/Emanuel Ungaro, the designer’s U.S. bridge line, has had consistent double-digit sales growth during its five years. For 1996, said president Maura de Visscher, the company will hit its projected $100 million in wholesale volume.
“We exceeded a very aggressive plan,” she said. “We had incredible growth in the collection. We expanded our offerings in the core line, and we developed the corporate casual groups and launched petites during the second half. We opened two 2,000-square-foot in-store shops at Saks Fifth Avenue and Bloomingdale’s this year.”
But not everyone is so optimistic about the bridge climate.
“My plan is to assume the retail climate won’t improve in 1996. I hope it does, but I’m assuming it won’t. We are continuing to fine-tune our product and work on our color, pricing and fit.
“We’re shopping for licenses in all categories,” Murry, president of Tahari, said. “We’re having conversations with coat and fragrance people, and we want to expand in Japan, Mexico and the UK over the next two years — somewhat in 1996, but more in 1997. We think that will become very important. We’re also launching a petite sportswear line for spring 1997. Overall, the increase for the corporation will be between 20 and 25 percent. I think that’s conservative, but I’m taking a conservative approach due to the uncertain retail climate.”
For example, Murry said, Tahari will bring its prices down on suits from $375 to $325, retail. The suit and dress divisions are being run as separate businesses by two newly hired vice presidents.
“We’re still doing ensembles, like sportswear dresses that work under a jacket,” said Murry. “The trends are what’s driving volume. We continue to be very jacket-driven, and we’re doing more color than we have in the past.
“Probably the biggest change is that knitwear is incredible. It’s going to be about 18 percent of our total. The dress business is the fastest-growing business.
To make sure they have the consumer’s attention, bridge companies are all planning some advertising into their 1996 budgets — most, like Emanuel, are continuing their current campaigns, and some, such as Tahari, will be launching one. “We will be doing some institutional advertising for the first time,” said Murry, noting that the print campaign will be developed in-house.
To support its new Dana B. & Karen line and solidify its bridge business, Dana Buchman is doubling its advertising and marketing budget, as well as continuing with in-store support such as look books, personal appearances and consultations with customers. Escada will start a “big, big push,” including a spring advertising campaign, for its bridge Laurel label, said Frasch.
“I think there’s an opportunity in the upper bridge diffusion market,” he said.