MYSTERIES OF SPRING: LATE DELIVERIES PLAGUE THE SCENE AT RETAIL

Byline: Janet Ozzard / With contributions from Samantha Conti, Milan / Miles Socha, Paris

NEW YORK — Retailers heading off to Europe are clutching their plane tickets, their show schedules and, in some cases, their stomachs. The agita is coming from late spring deliveries, which bedevil stores annually.
“It’s almost March, and I still have nothing in the store,” said Jeffrey Kalinsky, owner of the two Jeffrey stores here and in Atlanta, on Tuesday afternoon. “It has never, never been this bad.”
Kalinsky was more forthcoming than many other retailers, who would admit only to “spotty” late arrivals. And he doesn’t bulk up on resort and pre-spring deliveries the way bigger stores do in an effort to keep shelves filled during the post-holiday lull.
But still, this year’s deliveries — particularly the runway collections, which should have been on the floor by mid-February — have been a headache, with the problems coming more from European lines than Americans. And the smaller stores, like Jeffrey, say they are last on the list of retailers to get their shipments.
“It’s frustrating, but it’s a game I can’t win,” said Kalinsky.
Here are some of the problems:
than many other retailers, who would admit only to “spotty” late arrivals. And he doesn’t bulk up on resort and pre-spring deliveries the way bigger stores do in an effort to keep shelves filled during the post-holiday lull.
But still, this year’s deliveries — particularly the runway collections, which should have been on the floor by mid-February — have been a headache, with the problems coming more from European lines than Americans. And the smaller stores, like Jeffrey, say they are last on the list of retailers to get their shipments.
“It’s frustrating, but it’s a game I can’t win,” said Kalinsky.
Here are some of the problems:
A claustrophobic production cycle. Retailers are finalizing orders in late October or early November and will continue tweaking those as they see what’s happening during the crucial holiday selling period. Factories have to then rev up to produce it all for January and February shipments. Factor in various holidays — Thanksgiving, Christmas — in various countries, and delays start to pile up. For example, many Italian mills and factories close for two or three weeks over the Christmas and New Year’s holiday season.
Fabric mills often experience delays completing their shipments, which throws a wrench into the whole process.
Big trumps small. If an LVMH company is producing at the same knitwear factory as a small, independent company, guess whose order is going to get finished first?
Fall has a psychological advantage in Labor Day, which reminds Americans to go out and shop for fall. Spring, however, has no such landmark.
“It’s a difficult environment in general,” said Ron Frasch, chairman of Bergdorf Goodman, during shows last week. “I think the weather has a lot to do with it. No one is thinking about buying spring when it’s freezing outside.”
Then there’s the Donna Karan Manifesto: Putting spring clothing on the floor when snow is still in the forecast confuses the customer.
Karan has often said that she would like to see stores push deliveries back a month or so, to allow what’s hanging on the racks to correspond with the outdoor temperature. And with fashion shows becoming major media events, the consumer is now completely turned around.
“I would be happy to show fall that time, when it’s fall at retail,” Karan said last week, while protesting New York’s earlier spring runway dates.
It’s a hot-button issue that gets executives rolling.
“We have had some late deliveries in many very important places,” admitted Judy Collinson, executive vice president and general merchandise manager for women’s at Barneys New York.
“Some designers seem to know how to deliver on time, and others are chronically late,” said Ann Stordahl, senior vice president and general merchandise manager at Neiman Marcus. According to stores, designers who are delivering well include Dolce & Gabbana, Ralph Lauren, Prada, Michael Kors and Calvin Klein.
Of course, retailers griping about deliveries is about as novel as New Yorkers griping about delays at LaGuardia airport. There are deeper issues feeding into the late deliveries, and those are the real problems, say executives.
First of all, show dates are creeping up earlier and earlier in the calendar, with the justification that earlier shows result in earlier orders, which should help deliveries.
“I have yet to see that happen,” said Stordahl. And with New York’s Fashion Week now scheduled to start just after Labor Day, retailers are already annoyed that they will be looking at yet another spring season when fall has barely gotten on the floor.
Second, preseason orders now make up at least half of most designer buys. The fashion shows are enticement, but deliveries from those shows are becoming less important, said retailers.
Joseph Boitano, senior vice president and gmm at Saks Fifth Avenue, said deliveries there have been generally good, with some soft spots coming out of Europe. However, the store changed its strategy this season, he said. “We intensified our precollection orders, and those are shipping nicely. We find prespring and resort have great deliveries and great sell-throughs. We use the runway mainly for our fashion and press coverage.”
“Retailers are coming back to the table, because they are realizing that the precollection deliveries are necessary in order to have some continuity,” said Michelle Stein, vice president of sales at Aeffe USA, which handles manufacturing and sales for Narciso Rodriguez, Jean Paul Gaultier, Alberta Ferretti, Moschino and Rifat Ozbek. “They see it doesn’t have the pizzazz of the runway, but they need it for the continuity.”
Still, manufacturers haven’t given up on selling runway looks.
“For the first time, we are breaking the runway looks into three deliveries,” said Stein. The Ferretti line is adding a prefall collection for the first time, she added.
And finally, there’s the looming specter of markdowns. No matter when manufacturers get their goods in, sales start in May and January. That means the most forward looks from the runway, which are probably the most difficult to sell, have the narrowest selling window.
Kalinsky said he gets a particularly raw deal because department and big specialty stores tend to get deliveries earlier, and also start marking down very early. “No matter what I do, I can’t stop the other stores from marking down in May, and that means April is basically a wash,” because the fashion customer has already bought a lot of spring and is holding out for the markdowns.
Stein said the squeeze is becoming impossible.
“Spring-summer is becoming increasingly difficult. The orders come in late, and there is absolutely no way we can make the projected margins of the stores” on the runway deliveries, she said, because by the time those orders are placed and shipped there’s a tiny window of full-price selling before markdowns.
Stores swear that earlier deliveries mean more sell-throughs and fewer markdowns. Stordahl, Boitano and other store executives said resort was one of their bright spots in an otherwise lackluster holiday season.
Manufacturers say they can kill themselves to get the deliveries done early but it becomes meaningless when stores — after demanding markdown money, vendor allowances and co-op ad dollars — hold wildcat one-day sales.
But the stores feel they are doing business as it has always been done.
“We make our plans based on regular-price sell-through achievements, and so on-time deliveries are clearly very important,” said Stordahl.
“There are fundamental issues that need to be looked at,” said Stein. “The customer is trained to come in during November and December to look at spring, and then wait until January when it’s marked down to buy. It’s a vicious, vicious cycle. The show dates need to be later, we need a better flow.”
Spring is rife with dilemmas, she said.
“Think about it: We are going to be showing in September, but we won’t get the final orders really until November,” Stein said. “And they want the goods by January, but we have to work around Thanksgiving and Christmas. And every season, there is some kind of issue with the fabric manufacturers.”
“I really believe there are two factors involved,” said Mario Boselli, head of Pitti Immagine and Italy’s National Chamber of Fashion. “First, there was an increase in [Italian] sales to the U.S. this season, and while that’s positive, the added demand may have created a small problem with production. Second, the spring season is always more challenging than the fall because of the Christmas holiday. Italian factories close down for at least a week, many two — making an already short production season even shorter.”
Andrea Pinto, president of Paris-based Nina Ricci, said streamlining the production process to insure earlier deliveries is no easy feat since “the fashion system is like a chain” and if one link is missed, everything else goes amiss. “It’s still very difficult to have the fabric in time,” he said.
The problem is exacerbated by the fact that the big luxury groups, who tend to “drive fashion in one direction,” are usually first in line for deliveries, while others must wait, he said. Layer on that the fact that fabric shows take place during runway shows, which means designers can’t make fabric choices right away.
Pinto also noted that some silk printers in Italy have recently been obligated by law to use more environment-friendly processes, which are prone to defects that result in delays.
As a result, Pinto said precollections have become increasingly important. But to help improve deliveries, he said he plans to buy more fabric in advance of orders. “We deliver,” he said. “But we could do better and we will do better.”
Europe-bound retailers admit that they’re not so inclined to be generous with their fall open-to-buys when their spring deliveries are still incomplete. “It does have an impact on what we plan to buy,” said Stordahl.
“In all honesty, even though it shouldn’t affect fall, it does,” said Barneys’s Collinson. “It makes you hesitant.”

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