DESIGNER/BRIDGE: LESS CAN BE MORE

Byline: JANET OZZARD and DIANNE POGODA

Retail consolidation hit the designer and bridge worlds hard in 1994, with specialty stores, ranging from Martha’s to I. Magnin, disappearing and the impending store closings resulting from the Federated-Macy’s merger.
While the moves definitely have some smaller companies worried, major names say they think consolidation will be a benefit to them because they will become more important to the remaining stores.
But no matter how big their businesses, designers are all looking for new ways to build business. Among the most important are:
International expansion, whether through their own stores or wholesaling through an agent.
Merchandising each account separately to make sure stores don’t start to look identical.
Opening up signature stores and in-store boutiques staffed by their own salespeople.
Licensing a hot name to build overall brand awareness.
Last year, the designer market played its usual game of musical chairs in the executive ranks, as many firms sought out top talent to drive ambitious expansion plans.
International expansion, into Asia, Europe and South America, in fact, is high on almost every company’s list, either through licenses or through their own boutiques.
Sourcing headaches intensified last year and are expected to continue in ’95 as European mills — gripped by a weak economy — have been steadily raising prices. Some designers said they would counter by buying early, while others said they would try to source domestically.
As for fashion, the trend for novelty at all price points was cited as the top consumer motivator. Whether it’s an item such as a vest or blouse, or a novelty fabric, button or detail, manufacturers said consumers will pay full price if they feel it’s worth the money.
Meanwhile, the dress and suit business has continued its strong performance, outpacing the apparel market in general.
Consumers’ continuing quest for value in clothing purchases has boosted the two ready-to-wear categories, and makers anticipate they will keep up the pace this year. They base their optimism on solid bookings at regional markets late last year and good results at retail.
Among the key issues for designers are maintaining value, gross margins and last year’s momentum. Keeping a lid on costs is also a challenge, particularly as labor and materials costs are on the rise.
Makers are focusing on creating classic — not overly trendy — merchandise. They say they must adjust their production so neither they nor the stores get stuck with unwanted inventory and become engaged in a promotional markdown war.
The value issue is among the most serious facing the industry and the designer market is not immune.
Bud Konheim, president of Nicole Miller Ltd., summed up the key to business this year as avoiding the sameness that plagues so many department-store floors. And because the major stores had so much of the same product, the stores were “on sale” all the time. The highly promotional nature of the business in 1994 wasn’t healthy for anyone, he observed.
“When one of the majors goes ‘on sale,’ the others all jump in, and everyone throws away markup,” he said. “The key is to offer the customer an exciting product at a good value, so she wants to buy it at regular price.
“One of the main reasons we’re going to Las Vegas is because a well-attended trade show attracts a lot of specialty stores looking for new merchandise and new resources,” he said. “Stores are our vehicles to the customers, and trade shows are a great way to meet new contacts.”

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