DESIGNERS CONFRONT TEPID ECONOMY WITH NEW PRODUCTS, VENUES
Byline: Eric Wilson
NEW YORK — If it takes a dose of reality to shake up the often ethereal world of fashion, it’s safe to say that the latest economic downturn in the U.S. has the designer market considerably stirred.
At a time when America’s major fashion brands all seem to be in a state of transition, with Donna Karan on her way into the LVMH Moet Hennessy Louis Vuitton stable, Calvin Klein retrenching from bridge and Ralph Lauren taking on a European expansion effort, the biggest fashion trend for the season appears to be upheaval.
Adding to the sense that more changes are likely in store for the second half are continuing reports of disappointing sales at the nation’s major retailers and also what can arguably be called a slowdown in the growth of the European luxury conglomerates. While there are several exceptions, some vendors said the first half of 2001 has been the worst six-month period in a decade, with little optimism for a quick turnaround.
“There is still a very cautious attitude toward what’s happening in the economy in general,” said Michael Pellegrino, president of Anna Sui. “It’s a little bit self-fulfilling, unfortunately, because retail reports have not been the best and that’s only added to the concern.”
Lest anyone think that the sky is falling, designer companies including Anna Sui and Marc Jacobs have taken a number of steps in recent years — when the American economy was robust — to protect themselves from the inevitable by expanding into overseas markets and launching new product categories.
In recent interviews, executives from various designer firms agreed that in the coming year the mantra for growth will continue to be in developing their companies horizontally, by spreading their interests into more categories and channels of distribution.
“Business in 2001 is more difficult than it has been in the last seven or eight years, but we’re definitely hanging in there and taking steps to keep it nice and healthy,” said Gordon Finkelstein, president of Tocca, which is launching a handbag collection for fall and expanding its beauty business.
“We’ve actually noticed a lot of stores are still scrambling around trying to buy stuff for fall,” said designer Cynthia Rowley. “This is definitely the closest to season we’ve ever had and I think that’s because editorial is really supporting the special and more artistic things in people’s collections. The fact that they’re not showing that they’re scared will keep customers excited about the new season.”
For instance, styles from her fall collection that have led the pack include sportswear with tromp l’oeil details, suits with men’s wear tailoring and retro short skirts. Plus accessories, such as boots and belts, have been a leading category.
“It’s a time when designers shouldn’t compromise their creativity,” Rowley said. “For us as a company, we are growing horizontally by doing a number of things, rather than compromising the integrity of the collection.”
Scott Schuman, owner of Schuman Showroom, also said sales have been strongest on items that are distinct from overall trends in the market within the collections he represents — James Coviello, Peter Som and Chan Paul. For instance, Coviello’s quirky and feminine pinstripe separates, which wholesale for around $450, have been one of the strongest looks in his line.
“It’s not so much a question of price point right now in the market,” Schuman said. “It’s coming up with something original, creating something for the customer that will recognize how that piece is going to fit into their lives.”
Designers said customers are being more selective in a tight economy, though they stressed that clothing seems to be a category that isn’t necessarily as impacted as higher-ticket items like luxury automobiles or home sales. Several companies are taking the opportunity, after years of dizzying expansion, to reign in their spending and tighten operations.
Calvin Klein announced a restructuring this spring that includes the elimination of his CK bridge business, noting that he wants to focus the direction and marketing of his brand on the high-end collection. A spokesman for the company said on Tuesday that while customers are being more selective, the fall collection has still had a strong response during buyer previews.
“We’ve had a great response to luxury items, such as our matte napa shearling tunic and dress, our new patinated leather pieces, especially the pants, and a double-breasted jacket in satin napa plonge that’s worn with a side-pleat short skirt,” he said. “In evening, viscose matte jersey has been strong, especially the open-sleeve, jewel-neck dress from the fall runway.”
Polo Ralph Lauren Corp. has been instituting a number of changes related to an operations overhaul instituted under the direction of its president and chief operating officer, Roger Farah. They include the acquisition of its remaining European wholesale licensee this month, completing a campaign to take direct control of that business. Polo is also restructuring the Club Monaco retail chain and has realigned some top executives, such as vice chairman Lance Isham, who moved to London to take charge of its European expansion.
Donna Karan, meanwhile, is in the midst of being acquired by LVMH in a transaction expected to close in September. This week, its chief executive of four years, John Idol, also stepped down and was succeeded by Giuseppe Brusone, an LVMH appointee. While the company is in transition, there remain some major projects on tap, such as the planned opening of its collection flagship at 819 Madison Avenue in New York this year.
The project, which according to plans includes Isometrix lighting, dramatic windows that overlook an Asian stone garden and black and white walls created from hand-applied venetian plaster. Furnishings in the 10,000-square-foot space include a mix of golden teak from Bali, hand-carved and ebonized mahogany, oxidized brass towers and tables and hand-cut raw edge black granite. A spokeswoman for Donna Karan added that trends that have booked well from the collection include “military suits, long skirts and boots and the body jersey turtleneck dress. Basically anything that’s very body conscious and that mixes elements of masculine and feminine.”
Michael Kors is expecting a very good fall, indicated by its wholesale orders which exceeded projections for the season and several fall trunk shows, said Barbara LaMonica, president of Michael Kors.
“Equestrian was a major theme in our fall show, and is proving to be very strong at retail,” she said. “Our riding pants in leather, cotton, and wool have blown out. Everything in outerwear from two-tone doubleface to fur has done well and knitwear is always strong, in particular our novelty cashmeres.”
At Marc Jacobs, the firm has shipped about 20 percent of its fall merchandise and seen good sell-throughs to date, with light-weight wool suits being an early stand-out, said Robert Duffy, president. “The collection for us was very strong both critically and commercially,” Duffy said. “We also had one of the strongest retail seasons in our history for spring. When the economy does really well, I don’t feel well. It’s been like that our entire career.”
As for Jacob’s growing roster of stores, construction issues are expected to create a short delay in the opening of planned spaces for accessories and women’s wear on Manhattan’s Bleecker Street, originally planned this month, but the company is also aggressively shopping for additional locations for stores uptown and in Los Angeles. Duffy also said the firm will start searching for a Paris location this year.
Anna Sui is experiencing some flat orders domestically for fall, Pellegrino said, but the company has seen growth in other markets, such as Korea and Taiwan.
“Having these opportunities outside the U.S. helps balance a somewhat flat trend we have been experiencing here,” he said. “We’re in the midst of obtaining orders for our spring I market, and we have noticed some orders have increased slightly, which is a good sign.”
Also on the horizon for Sui is an eyewear collection with worldwide distribution, licensed to Allison, an Italian manufacturer, which will premiere in Paris in October, Pellegrino said. The launch will be called Anna Sui Vision, with a mix of ophthalmic frames and sunglasses. The company is also in negotiations for potential licenses in home furnishings, he said.
For Escada, spring sales “never got off the ground,” said co-president Caryn Lerner, but fall has seen a dramatic increase thanks to a number of steps the company took to weather what was expected to be another slow season. Even in its temporary retail location at 410 Park Avenue in New York, open for the summer during the construction of its new Fifth Avenue flagship, the company held a trunk show in June that topped $1 million. The firm also has plans to open two new stores — in Plano, Tex., this year and at the Short Hills Mall in New Jersey in 2002.
“I think we’re beginning to see a turnaround and if we continue to see these improvements in the fall season, we can be more optimistic in planning spring 2002,” Lerner said. “We’ve reacted by merchandising more neutral suits, but also by focusing on eveningwear, which continues to be an incredible category for us.”
In an effort to diversify the dress and sportswear brand, Tocca has branched out with a handbag collection launching for fall, while also expanding its beauty business, “so we are not putting all of our eggs in a ready-to-wear basket,” Finkelstein said.
While the fall season overall has been softer in comparison to last year, he has noticed a bit of an upturn in holiday orders. Tocca is launching its new beauty and candle products for the holiday season in an effort to pull in some year-end dollars, with such examples as a travel set of candles that includes four votives packaged with a matching Tocca matchbox. From the collection, specialty coats have been particularly strong, as have dresses with muted embellishments and printed-wool separates.
“A lot of what we’ve done this year is to focus on production,” Finkelstein said. “The main thing is getting the product to market as early as possible, just to have it on the floor longer. We’re probably shipping fall about three weeks earlier, at the beginning of the shipping window right now, instead of toward the end of the window, which is Aug. 15.”
The conditions of the market have also had little impact on scaring away new launches in the designer market. Some are even expecting the season to be a trip, such as a collection called LSD by 25-year-old designer Lesley S. Devrouax, a former intern for Isaac Mizrahi and a recent alum of the CK Calvin Klein design staff.
With a small group shown out of her Park Avenue South apartment, Devrouax is targeting the Daryl K and Katayone Adeli customer base with an attractive collection of separates designed for the urban party girl. Highlights include fitted jackets with pleated puff shoulders, slashed leather vests and dark wash jeans with pink metal zippers at the ankles, an ode, she said, to Mizrahi. The line is priced to wholesale from $20 to $250.