SINK OR SWIM
FACED WITH LESS-THAN-IDEAL RETAIL (AND WEATHER) FORECASTS, RESORT AND SWIMWEAR MAKERS ARE KEEPING THEIR HEADS WELL ABOVE WATER BY SEEKING DIVERSITY IN MARKETS AND UPGRADING STYLES.
Byline: Georgia Lee
In the past few years, Americans have taken to traveling in unprecedented numbers; the resulting flurry of new spas, hotels and shops has been a blessing to resort-oriented apparel manufacturers. Consumers are taking longer and more expensive vacations, with access to more affordable package vacations, through travel agents and the Internet. Resorts from the Hilton to Holiday Inn properties have sprung up to accommodate heavier tourist traffic in coastal areas, according to the Greater Miami Conventions and Visitors Bureau.
Lately, however, an uncertain economic outlook, a disappointing holiday retail season and a spate of chilly weather have all presented a few challenges to the category.
Ironically, though, vendors may be better poised to overcome such obstacles than ever before: Resort apparel has expanded well beyond the T-shirt realm. Targeting upscale specialty stores and resorts, manufacturers now offer more fashion silhouettes, luxury fabrics, embroidery and other novelty details. Manufacturers are also seeking new distribution channels, from catalogs to corporate gifts, and expanding into niche markets such as plus sizes and accessories. Manufacturers are also expanding private label programs and incentives to give price-conscious buyers more bang for the buck.
Private label programs have spelled success for Miami sportswear manufacturer 5th & Ocean. Private label, now constituting 55 percent of sales, has outpaced the company’s 5th & Ocean wholesale junior line, which was soft for the fourth quarter. Private label business has opened up new accounts in resorts, theme parks, restaurants and airports.
The junior line includes updated crossover looks in private label offerings. Beyond original T-shirts and sweatshirts, private label groups now offer novelty tops with mesh, lace and other details. The fall line includes corded or sueded fleece or French terry and other novelty fabrics slated for higher-end accounts.
Private label bookings for the first quarter are slightly less than $3 million for clients such as Disney World, Hard Rock Cafe, Planet Hollywood and cruise lines such as Princess and Greyhound Leisures.
Another advantage of the junior line: “It allows us to gauge trends and advise corporate buyers about fashion direction,” said Alex Leiter, 5th & Ocean’s president. He added that domestic cut-and-sew manufacturing allows early bookings and quick turnarounds. “Everyone is price conscious — private label offers them deals and incentives,” he said. Total company sales for 2000 were slightly less than $10 million; the projected volume for 2001 is $12 million.
Corporate gifts and promotions have been a promising opportunity for Sun N Sand Accessories Inc., a Dallas handbag manufacturer and importer. With around 1400 retail accounts in Florida and the Caribbean, the company also offers custom packages to travel agents or corporations, an untapped market with sizable growth potential.
“We want to explode the corporate promotional gift area, which has been underserved,” said Samir Ahuja, Sun N Sand’s president, who said business has increased so much “it’s a challenge to keep production up to demand.”
Ahuja said that while the handbag business was sluggish, his resort business was still riding the wave of the recent economic good times, as well as consumers’ having more expendable income to devote to travel. The two-year-old company increased sales 150 percent in the past year, with promotional gifts making up 25 percent of sales. In addition, Sun N Sand acquired the license for Laurel Birch, a San Francisco accessories designer popular in the Seventies who relaunched her line over a year ago. The new project has opened up department store distribution, said Ahuja.
The Sun N Sand line is mostly screen-printed novelty designs, with 27 prints in 250 styles per season, in tropical or nautical motifs, priced around $10 wholesale. This year, matching cell phone covers have been added, while cosmetic bags and pareos have also seen increases.
Resort accounts, such as Sandals, often want their own embroidered logos, which add value, and a higher markup than screen-printing, said Ahuja.
Going after a more upscale resort clientele with better product has been the focus for Surfival, a Miami resort sportswear manufacturer. The company has become more selective in new accounts, choosing luxury resort hotels, over beach shops, to distinguish itself from discounters or department stores.
“These better resort stores have good credit, a better clientele and better merchandise [with] a great presentation,” said Eli Dadon, president. “We’re trying to stand out among all the batik, rayon and Hawaiian design that’s so prevalent in the market.”
The line, priced wholesale from $12 to $28, includes French terry, lace, linen, seersucker, embossed and textured cotton, watercolor prints and cable knits, which all have been bestsellers for resort stores.
To service upper-end accounts, Dadon invests in product development, carefully editing a selection of four in-house designers’ ideas. Surfival’s fashion-forward looks require new fabrics and fresh ideas, which are gathered during frequent trips to Europe. The company keeps $1 million worth of in-stock merchandise reserved for quick and frequent reorders. The company recently introduced Limit Line, a group of logoed novelty sweatshirts, jackets and V-necks. Business picked up two weeks ago, after a weak December, with few reorders, said Dadon.
To stay competitive in an increasingly crowded market, many companies are upgrading fabrics and focusing on modern contemporary styling. Novelty and uniqueness helps retailers distinguish themselves from other distribution chanels, especially discounters.
Soft As A Grape, a Wareham, Mass.-based manufacturer of women’s, men’s and children’s custom screen-printed separates, has upgraded to ring-spun cotton and jersey fabrics and is using a four-color process for more sophisticated graphics. Basic silhouettes have also expanded to include dresses, cardigans, capri pants, shorts and sweatshirts.
To augment its resort and specialty account base, the company is targeting catalogs, which represent 30 percent of sales. In addition to wholesale, Soft As A Grape owns 18 eponymous stores in the Northeast and Florida. Multiple distribution channels, combined with retail, help boost year-round production, thus avoiding high or low seasons.
Sales increased 10 percent in 2000, despite slower women’s business since 1997, when business peaked.
“We’ve seen attrition in mom-and-pop stores in recent years,” said Ruthann Katzen, co-owner with husband Allen Katzen. “Independents have a hard time competing with discounters.”
Katzen said the screen-print category had become highly competitive, with more new players.
“Screen-print is easy to get into for anybody,” said Katzen. “To compete, we have to stay on top of color market and constantly offer new design.”
In addition to speculation over the economic downturn and the election debacle, manufacturers, particular swimwear firms, had to contend with unusually cold weather, especially in December. As a result, junior swimwear firms are waiting for a clearer picture of the state of business to emerge later this year.
Ron Solomons, national sales manager at Jennifer Kay Inc., parent company for three junior swimwear labels, did not expect to get a reading on the retail season until spring. While all swimwear sales are affected by the weather, the junior business is less subject to fluctuations in the stock market or the economy in general.
“No matter what, the juniors customer will go on spring break, and she will take at least two or three swimsuits,” he said.
The labels Endless Sun and California Waves were joined by a third division, Sizzle Beach, which bowed three years ago. Endless Sun targets a more sophisticated junior than the edgy California Waves, while the new Sizzle Beach division expands the target customer base further, with novelty separates that include more prints and embellishment.
All three divisions are designed with specialty stores and specialty chains in mind.
“Consumers are tired of department stores, and they like the selection and unique offerings of specialty swimwear stores,” said Solomons. “We like to support retailers with extended seasons that can sell swimwear year-round.”
Based on the initial success of limited offerings, the company will expand on plus sizes for the junior market, said Solomons, and will launch a new preteen line in the near future.
With so many new companies, from big sportswear firms to surf and resort lines, getting into swimwear recently, fashion-forward, novelty styling has become crucial.
Ultimate Swimwear, a Longwood, Fla.-based junior and contemporary swimwear manufacturer, expanded inventory last year, from 1,500 to 2,500 stockkeeping units, adding more color, fashion pieces and growing prints to 25 to 50 percent of the line. As a result, sales increased 50 percent.
“We needed more selection, something that would draw attention to a wall display for specialty stores,” said Gynn Picern, president of Ultimate Swimwear. “We were perceived as a solid house, and we were losing buyers to other lines for prints.”
The junior Ultimate Swimwear line now reflects sportswear trends, with glittery, beaded looks as current bestsellers. A second contemporary division, Ultimate Collection, has been successful with fabrics, texture and floral or animal prints. Coverups have also expanded, with a matching pareo for each contemporary suit, as well as novelty items such as bags that convert to beach towels.
With most manufacturing done domestically, the company recently began contracting a few programs in Colombia to accommodate expanded production for new accounts, including a few department stores.
Given the competitive market, price pressures have become tougher than ever, said Picern. Rather than lowering prices from the current wholesale $5-7 for separate pieces, Ultimate has increased incentives and deals for customers.
“Everybody is concerned with terms and prices, asking, “What can you do for me?”‘ she said. “Customer service is more important than ever.”