THE RUSH TO MODERATE DRIVEN BY DOLLARS AND SENSE
Byline: Kristin Larson / Rusty Williamson / With contributions from Kristin Young, Los Angeles
NEW YORK — Do “young and hip” and “moderate sportswear” go together?
Well, they do now, according to vendors as well as retailers. They claim a younger, hipper attitude is taking over — and in the last few months it’s generated more activity than the sector has seen in years.
Driven by an increased demand for clothes that are affordable yet current and a consumer that thinks and looks younger than past generations, many moderate sportswear vendors are using terms like “refresh” and “update” to describe the wave of new lines and restyled collections sweeping the market lately — and there are more to come.
Blame the growing population of aging consumers who have limited budgets and the lackluster economy for luring consumers away from higher-priced better lines, but this more youthful approach moderate makers are taking is being viewed as a lucrative way to build sales and attract a broad range of stores and consumers. This new fashion component hasn’t changed the attractive pricing of moderate sportswear, with tops and sweaters retailing for $25 to $50 on average, and bottoms selling in stores for $20 to $30. With $9 billion of the nearly $50 billion sportswear pie, this market is not to be ignored. That’s evident in the acquisition Tuesday of Gloria Vanderbilt Corp. by Jones Apparel Group and a new rollout by Liz Claiborne with Kohl’s and Mervyn’s.
“This younger or more modern attitude in styling is absolutely the right direction for moderate,” said Kathy Bradley Riley, division merchandise manager for sportswear at The Doneger Group buying office.
“Everybody is younger in thinking and it’s important to capitalize on that baby-boomer customer. There’s a whole segment of the market either being addressed from the speciality store better level or from store’s private label, and the moderate vendor structure really hasn’t been addressed — until now.”
Marshal Cohen, co-president of NPDFashionworld, a nationwide organization based in Port Washington, N.Y., that tracks consumer spending, said a trend toward value shopping started about two years ago, and the downswing of the economy and Sept. 11 just perpetuated that trend.
“People are recognizing that there’s more and more interest right now in being able to buy for value than ever before,” Cohen said. “It’s not about going out and buying one special outfit. You can buy a black skirt at a value department store just as easy as you can at an upscale department store. People’s values and priorities have definitely changed — …and those priorities are very different today than literally six months ago.”
Cohen said the pendulum started to swing toward value shopping when parents, who shopped for their own clothing at upscale department stores, would go to discount stores for their kids’ belongings.
“Now that’s transferred over for them shopping in chain stores themselves and finding that they don’t have to spend $100 on a skirt, but that $45 is OK,” he said. “The quality is there, the styling is good enough and they’ve learned there is some value to be had shopping at these locations. Even if the economy comes back, it doesn’t mean shoppers’ values are going to change.”
The timing and also the look — trendier styles, such as flat-front pants and ruffled blouses — while also keeping true to a more forgiving misses’ fit, is on target as well, said Riley, noting that moderate makers attempted a similar revival before, but were unsuccessful because they took the styles “too young.”
“Some of the toughest parts of the business right now is business that is traditional and core and basic in nature,” she said. “People are looking for new styles, slightly novel, but they are not looking to be teenagers. This is an opportunity stores have identified and have tried to make profitable for the past two years.”
At Gloria Vanderbilt, its moderate sportswear line did about $150 million at wholesale last year and goals for next year are set even higher at $215 million. President Jack Gross said those kinds of numbers speak directly to this market’s potential and the firm is planning to launch a label in spring 2003 that will specifically target the moderate contemporary consumer.
“Moderate started to pick up with the economy’s downturn+and there’s a downstream of consumers coming from the better area into the moderate price zone,” said Gross. “So it’s important that every manufacturer stay on top of design trends and continue to enhance their formula.
“It used to be you could continue with the same formula because that’s what got you where you are. But today, you have to be innovative and creative every season. You don’t have to be cutting-edge trendy in the moderate zone, but it must be commercially acceptable fashion trends for the masses.”
Companies that have recently made news by adopting this new look include The Leslie Fay Co., with a relaunch of the knitwear label Outlander; Sag Harbor, which has given its core career collection a younger, more casual look driven by separates, and most recently Liz Claiborne Inc., which has launched a new moderate line called Axcess this spring sold at Kohl’s and Mervyn’s — geared toward the young, contemporary shopper who’s pressed for time — and money. (For more on Axcess, see opposite page.)
“When you look at moderate and the brands that are the basis of that business, they lean toward the more classic and traditional. That’s because that tended to be the age group and mindset that shopped moderate,” said Helen McCluskey, president of special markets at Liz Claiborne.
“What’s happening today — and I’m sure Kohl’s is a big impetus behind this — is a lot of young women and young mothers are shopping these stores for convenience, great value and great prices. They’re buying their kids’ clothes, husband’s clothes, lingerie, sleepwear and I’m sure they would buy their apparel there if there was something that appealed to them.”
In addition, several retailers pointed to John Paul Richards, Emma James and Bentley Arbuckle as leaders in providing this new look in moderate.
“The whole idea of refreshing moderate is due to the fact that the 50-year-old today is not the 50-year-old of yesterday,” said John Henderson, executive vice president of Sag Harbor, a division of Kellwood Co., which also plans to relaunch the moderate label Bice with an updated, younger look next spring.
“Her needs have changed and you have to reflect that — it should be washable and not dry-cleaned, more room in the waist. It still has to have comfort and fit features of that demographic, but be more current. Our job is to interpret what they see in better sportswear and in the magazines into wearable, affordable fashion.”
Marty Brody, president of Sag Harbor, said Bice will be hipper and more modern looking than Sag Harbor, and a bit pricier. The challenge, however, is to offer fashion that’s current — but not too forward.
“This customer has certain needs, and if you move too quickly, taking her where comfort is not, you could miss the whole thing,” Henderson said. “She’s not going to wear totally sheer. She looks at the trends, but she’s not a trend leader.”
Bob Salem, a consultant and former corporate vice president of marketing at Leslie Fay, said the moderate consumer who’s looking for style has largely been underserved.
“The majority of these women have a moderate pocketbook and simply cannot afford better or bridge,” Salem said. “In the past, the prevailing view was to wait for better to go on sale. Our surveys tell us that she doesn’t want to wait for it to go on sale because then she is picking through merchandise and cannot be satisfied in terms of size, color or style. We see an enormous opportunity for this huge consumer franchise.”
What’s hot today in moderate is salable interpretations of runway trends: ruffles, lace, novelty knits, stretch fabrics and more body-conscious styling.
“We are all about being young and it’s one of the main keys to our growth,” said Bertan Kalatchi, president of John Paul Richard, a moderate label that targets working women ages 28 to 45. Sales goals this year are expected achieve a 14 percent gain to $165 million.
“A younger mindset is prevailing across the moderate playing field and the taste level has moved away from traditional styling,” Kalatchi said. “The moderate shopper has changed a lot since we started this company seven years ago. She is now highly aware of what’s going on in fashion. That means more stretch fabrics, novelty tape yarns and a slightly more body-conscious fit.”
Two years ago, Bentley Arbuckle, a moderate dress and sportswear label that’s been in business 17 years, began infusing its collections with a younger look. The strategy seems to be paying off, as sales are up by 12 percent to $7 million this year.
“The future of moderate is in more contemporary styling,” said Bard Hoover, vice president of sales. “That’s where the market is going. You just don’t see many misses’ traditional stores opening.”
Using what it calls a “realistic fit” that acknowledges less-than-perfect bodies, Bentley Arbuckle is gearing its line toward women ages 20 to 50 who are fashion-conscious — a far cry away from its early days as a conservative moderate firm.
“We used to do lots of cotton, polyester and rayon fiber styles, with more traditional appeal,” he said. “Now we’re into trendier lace, updated florals and lots of stretch.”
Retailers have applauded this new approach in moderate as a much welcome change in an area that has previously taken heat for its lack of fashion.
“Women are thinking younger regardless of their age,” said Conrad Szymanski, president of Beall’s Department Stores, a 67-unit moderate chain based in Bradenton, Fla. “We have to constantly keep updating to appeal to the moderate shopper. Even retirees, which are a big part of the Florida population, are much more accepting of new trends rather than just staying with purely traditional styles. We first started seeing it about four or five years ago and it’s getting stronger.”
In addition to seeking out more contemporary looks, Beall’s also is updating its private label clothing.
“Bay Studio, our updated misses’ fashion label, is our fastest growing private label,” Szymanski said. “And we’re aggressively funding it this year. We’ve determined that’s what our customers want.”
At Mervyn’s, a spokeswoman said there’s significant potential in moderate, noting that the category’s demographic group is buying more fashion-centric items, such as microgabardine stretch pants, twinsets and updated tops in place of traditional career suitings. This customer is not yet ready for low-rise pants or midriff-baring cropped tops, she noted.
Still, the spokeswoman for the Hayward, Calif.-based retailer said she has seen significant movement toward more fashion-oriented items. A dark denim blazer with matching pants by Hillard & Hanson has been selling strongly, she said. Average price points for Mervyn’s bottoms are between $45 and $59, while sweater sets and tops sell for $35 to $50.
“This customer has a very active lifestyle and has been more of a dress-up casual type of person,” she said, citing Nine & Co. as another strong label. “She doesn’t have to wear the whole suit thing. For us, we feel that the market segment addresses those needs. It allows our ‘guests’ to build a wardrobe that she can wear to work and out to dinner at social functions.”
Moderate sportswear customers at Macy’s West are also looking for a more relaxed and softer manner of dressing in place of traditional careerwear. Here, however, basics rule.
“The basics are trending much better than anything else,” said a spokeswoman at the San Francisco-based retailer, noting capris are not just maintaining their pace, but are selling better than they were this time last year.
The Macy’s West fashion department has also noticed more trendy items picking up speed in the moderate category, she said. Themes such as the feminine and romantic as seen in novelty ruffles or lace treatments, or Bohemian styles and urban cowboy looks are beginning to have relevance, she said, with Gloria Vanderbilt, Style & Co. and Emma James checking well.
Moderate by the Numbers
Major Moderate Retailers
Beall’s: 67 stores, based in Bradenton, Fla.
Macy’s East: 114 stores, based in New York.
Macy’s West: 137 stores, based in San Francisco.
J.C. Penney Co.: 1,075 stores, based in Plano, Tex.
Kohl’s: 394 stores, based in Menominee Falls, Wisc.
Mervyn’s: 264 stores, based in Hayward, Calif.
Sears: 870 stores nationwide, based in Chicago.
Target: 1,081 stores, based in Minneapolis.
Women’s Sportswear in Retail Dollar Volume For 2001
All channels:$48.35 billion
Mass Merchants:$9 billion or 18.6 percent market share
Source: NPDFashionworld Consumer