VENDORS’ HOT BUTTON: MARKDOWNS

Byline: K.M

NEW YORK — Vendors were bristling over the heightened demand for markdown money they said they faced at last week’s innerwear market here.
Buyers and merchandise managers from major buying groups — some of whom typically no longer come to the New York market — turned up to discuss price concessions as high as six figures, based on markdowns, vendors said.
Manufacturers claim they were particularly upset over the demands because innerwear, led by foundations, had strong Christmas selling. The markdown money, they said, is being sought to shore up a disappointing bottom line in apparel generally.
Stores go after this markdown money in several forms, vendors noted. They include special prices on promotional programs and takebacks of merchandise at full price. However, the favored method consists of chargebacks to the vendor against future payment.
Manufacturing executives would discuss the problem only on the condition that their names not be used. They also were reluctant to pinpoint specific stores.
The topic of markdown dollars was a notable sore point at last week’s Intimate Apparel Council meeting, sources said, and innerwear firms reportedly are resisting the pressure to comply. Some manufacturers say they’ll not give in, while others will try to work out a compromise on the amounts.
Here’s what the manufacturers were saying.
“It’s become legitimate robbery.”
“They were all coming in with a tin cup in hand, asking for 4 to 5 percent more in markdowns.”
“A lot of manufacturers didn’t think the stores really needed the additional markdown money, because lingerie business at stores had been great.”
“Stores were coming in with so-called report cards and compared margins among the different vendors. A lot of the cards are phony. We know. We talk to buyers every week, and we know what kind of business our lines do.”

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