TOUGHING IT OUT
Byline: Melissa S. Drier
BERLIN — It looks like 1995 is going to be another difficult year for German apparel retailers. With taxes and the cost of living on the rise, industry analysts expect consumers to tighten their pocketbooks when it comes to apparel purchases, and retailers are predicting flat sales, at best, in the coming year.
German apparel retailers saw sales fall by an average of 5 percent in 1994, with department stores and catalog houses chalking up bigger losses than specialty stores, according to August Moller, managing director of the German Retailers Association in Cologne. For ’95, he continued, retailers are “in no instance” planning on increases.
“There’s a general insecurity in the market that isn’t directly linked to fashion,” Moller commented. But at the same time, he pointed out, sales are suffering because there are no visibly clear new trends for the consumer. Retailers should work intensively at CPD, he recommended, to look for new fashion and themes that could stimulate business.
Moreover, Moller predicted that a selection process will get underway in the season ahead, as retailers reevaluate their brand assortments. “Stores must separate themselves from brands and products that haven’t performed in the past. They must work with brands that clearly address their target group, even if it means dropping labels they’ve had for a long time,” he said.
“Generally speaking, I think German retailing is facing a very difficult year, even more difficult than ’94,” remarked Hartmut Kramer, managing general partner for the 50-store, Dusseldorf-based Peek & Cloppenburg chain.
According to Kramer, consumers have less money to spend and as part of “a more long-term trend, spending priorities are shifting significantly. There’s less retail consumption in favor of more leisure-oriented consumption, and clothing has been especially hurt.”
“In a shrinking market, fight for market share is a much more important part of the game,” he continued. “We believe the consumer is still going to buy if offered an attractive choice. And if that choice is at an attractive price, she’ll buy that much easier.”
In light of that strategy, Peek & Cloppenburg is focusing on highly know branded products but with a “definite increase in price-attractive house labels,” said Kramer.
Faced with an overall sales drop of 7 percent in 1994 and a 2 percent decrease forecast for 1995, Rolf Peper, director of central buying for Karstadt, the Essen-based department store chain with more than 160 branches, is nonetheless taking a fairly optimistic view of the year ahead.
“We’re expecting a lot of positive developments. There were a lot of mistakes in 1994 to make up for,” he acknowledged, such as the blouse and dress classifications, where more business could have been done, and overall sluggish performance in coats and suits. The question of length was, and always remains, a problem, he said.
But while coats were weak, jackets became and continue to be very important. Karstadt tripled its business in blazers, with cashmere a frontrunner, while outdoor jackets are a growing category. And if conventional suit sales are slack, Peper sees “a big potential” with pantsuits.
Young fashion, or juniors, is also expected to stimulate business in the coming season. “Not the extreme oversized look, that’s not a department store theme,” he commented. “But jeans; very little, sheer mini dresses; long skirts; short tops — these items will liven up the whole fashion picture, even though they’re young.”
“The rejuvenation of the woman,” as Thomas Haas, manager of the better specialty store Mode Schmidt in Dusseldorf, expressed it, has become a major theme in the German market. “We’ll certainly be pushing somewhat younger fashion. The trend is extremely strong, even for older customers. It’s a matter of being younger in style,” he said.
Consequently, Haas expects classic apparel, formerly one-third of the store’s assortment, to be significantly reduced in favor of “more girlish looks.” He cited new “little suits” as an opportunity to turn the troubled businesswear sector around, as well as jacket dresses. As Haas prepares for the season’s first major ready-to-wear fair, he said Mode Schmidt would be considerably more cautious for fall-winter ’95-’96. “Pre-orders will be limited to 10 to 15 percent, a significant drop,” he said, “and a maximum 55 to 60 percent of the store’s open-to-buy will be placed, as opposed to 70 to 75 percent in previous years.”