RETAILERS ARE RELYING ON BUYING OFFICES TO ASSIST IN DETERMINING WHAT’S HOT AND WHAT’S NOT.
Byline: Jessica Handler
Although many retailers are coping with shrinking budgets, they continue to allot funds for relationships with buying offices — widely considered a retailer’s must-have.
Arlene Goldstein, fashion director for Saks Inc., oversees color and trend for Saks, Parisian and Carson Pirie Scott. She works with two buying offices: The Doneger Group in New York and Directions West in Los Angeles. “Information is power,” Goldstein said.
Julie Routenberg, owner of Potpourri, carries bridge and young designer lines, including Cole Haan Leathers and Lafayette 148, at her two Georgia stores, located in Buckhead and Sandy Springs.
She calls her association with New York buying office Gregor Simmons Ltd. “one of the best checks I write every month.”
Gregor Simmons Ltd. represents approximately 62 specialty stores throughout North America in bridge, designer, and social lines.
“We comb the market at the beginning of the season,” said Gregor Simmons, the firm’s merchandise manager. “While technically buying offices don’t buy for stores, we shop the market on their behalf and recommend. Most stores are so independent at this point…they want to make their own decisions.”
Gae Marino, vice president of The Doneger Group, originally founded as a buying office in 1946, said a buying office is an “extension of the retailer — their eyes and ears on a daily basis.”
The Doneger Group has eight divisions, including a virtual showroom, The Doneger Marketplace, where manufacturers can present product to retailers online. The company is “proud to be a buying office, but it doesn’t apply to everything we do today,” said Marino.
Doneger Consulting, a new division, performs special projects for corporate clients, including Starbucks Coffee and Procter & Gamble. Retail clients range from mass merchant Wal-Mart to department store Nordstrom.
Milt Crane, executive director of Mart relations for the AmericasMart said there are fewer buying offices in operation these days, partly because of the expense for a retailer. Not all retailers require the service of a buying office, but, he said, they can be a “help in setting up an open-to-buy, make sure you don’t overbuy, and help to set up your systems.”
The recent decline in the number of buying offices can be linked to increased competition in the retail environment.
Saks’ Goldstein said the diminishing number of buying offices is “a sign of the times,” noting that it mirrors the consolidation in the retail industry.
But a buying office is a valuable asset regardless of the state of the economy, said AmericasMart’s Crane.
“With the economy as tough as it is, people need all the help they can get,” he said.
He added that retailers need to “be aggressive about coming to market, interfacing with other retailers. Things won’t get better if you cut back on your open-to-buy and think you’ll weather the storm.”
Although cost structures for using a buying office vary, Marino of The Doneger Group said that her company’s clients pay a retainer fee based to some extent on the size of their operation and the amount of services used. Volume buying or a set-up charge can dictate pricing, according to Crane.
Bailes Cobb in Hartwell, Ga., is a 5,000-square-foot men’s, women’s and children’s apparel retailer focused on the moderate-to-better category.
The family-owned department store has been in business since 1929. Owner Mary Lynn Johnson attends every show in Atlanta and buys her major lines here. She does her basics — tops and trousers — out of The Doneger Group
Market direction is important to Johnson. Located in a small town, she said “my customers don’t want to see themselves coming and going.” She attends The Doneger Group’s major season presentations to get an overview of what the firm regards as the strengths of each category she carries.
Bob Gurwitz, co-owner and president of Julian Gold, a retailer with units in the Texas cities of San Antonio, Corpus Christi and Midland, is another fan of buying offices.
In the 56 years Julian Gold has been in operation, Gurwitz estimates that they have used four different buying offices. Gurwitz said he chose Gregor Simmons about six years ago. A buying office, Gurwitz said, should be evaluated based on service level and shared taste. One crucial attribute is that “they understand what our customers are about,” he said. Also important, he said, is the strength of the buying office’s relationships in the market.
“We feel we need a buying office to take care of certain things — reduce the time we have to stay in New York, help us find new resources, help with problems like return policies or problems with a special order.”
Ingenuity can highlight a relationship. Routenberg of Potpourri remembers looking for dressy camisole tops to fill a need in her merchandise mix.
“We were racking our brains, wondering, ‘Should it be a lingerie line?’ The buyer went to a store in New York, searched their lingerie department, found a line that was fabulous, and had them call me,” she said.
From the manufacturer’s point of view, a retailer’s relationship with a buying office can be an opportunity to give a voice to its customers.
Jaime Nortman, regional sales manager at Go Silk, a New York manufacturer, said buying offices provide her with “feedback from stores about a void in the market.”
Not all retailers support the idea of using a buying office, however.
Kathy Munden, owner of Shay Leslie in Elizabeth City, N.C., acknowledged that a buying office may benefit some retailers, but added “We’re very one-on-one with our customers.”
Even retailers who use buying offices agree that it is both an expense and a tool that can be misused. Routenberg said that although some stores give buying offices open-to-buy monies, she exercises veto power over selections. Gurwitz said that some stores use buying offices for the wrong reasons, including using them as buyers rather than as a resource.
“There are things they like but we don’t like, but it’s my job and my buyers’ job to decide what’s good for my customers,” she said.
Helpful Hints in Choosing a Buying Office
Ascertain the extent of services you want from your association with a buying office. Are you looking for market direction? Trend tips? Negotiating special terms?
Ask retail and manufacturing colleagues which buying offices their firms use and why. Recommendations from people you trust are important.
Do representatives of the buying office share your taste and understand your profile? Does it “get” you and your customers?
Will the buying office communicate as efficiently and regularly as you like? Will it be there when you need it for special orders or problem returns?
How will it serve you specifically? Does it hold presentations or seminars? Will it assist in paperwork, ordering and international issues, if necessary?