COURTING THE SMALL STORES
Byline: Rusty Williamson
DALLAS — Moderate vendors are romancing specialty stores with a renewed passion.
Several fashion firms, including Leslie Fay and Jerell, are rolling out marketing and merchandising programs to increase volume with specialty stores as they diversify their account base from the usual department store distribution.
The tactics include offering trendier styles, priority shipping, more regal labeling and hangtag programs, and intensified regional road outreach campaigns aimed at smaller stores that are too busy to attend every market.
As specialty store ranks continue to thin across the U.S., vendors said they are committed to helping the survivors forge an identity distinct from the rival department stores.
Vendors that do business with both specialty and department stores made it clear, though, that they aren’t playing favorites. They’re just waking up to the fact that doing business with disparate retailers requires highly specific game plans.
“We started selling to specialty stores 50 years ago, and we’ve never stopped,” said Bob Salem, director of marketing at Leslie Fay. “We’re very sensitive to their needs. They’re not interested in the cheapest price point in the world because they don’t want to lower their average sales check. So it’s very important to them that we maintain a certain level of price integrity so they can have an average sales check that’s consistent with their sales-per-square-foot needs.”
He said order fulfillment is crucial to specialty stores, noting, “If you short-ship them or cancel a style that they were counting on, you are really hurting that store. We automatically pick their merchandise first when shipping.”
With its Haberdashery by Leslie Fay and Leslie Fay Dresses labels, the company generates about 20 percent of its yearly volume, projected to be $230 million in 2000, with specialty stores. Five years ago that figure was 30 percent — mainly because there are fewer such stores around today.
“But we are doing more business per account,” Salem said. “We’re getting a greater piece of the specialty-store pie.”
Since January Leslie Fay has been providing to specialty stores, at no cost, an in-store fixturing program designed to increase the number of units a store can merchandise per square foot.
“We’ve had quite a few takers, to say the least,” said Salem. “Besides making their stores more efficient, it adds clarity to the Leslie Fay brand.”
The company has intensified its regional outreach to specialty stores and has seven road representatives peppered across the U.S. Leslie Fay also has tentative plans to use the Internet to court specialty stores in the future.
“We’re discussing setting up a virtual showroom so that stores that don’t have access to our showrooms can buy over the Internet,” Salem said. “The scenario might include allowing stores to tap into our inventory system so they can automatically reorder or get up-to-the-minute status reports on their pending shipments.”
At Jerell, a division of Haggar Clothing Co. in Dallas, specialty stores comprise 35 percent of yearly sales of about $70 million, said Sam Klapholz, senior vice president.
“When it comes to doing business with department stores, pricing concerns are right at the top of the list,” Klapholz said. “Specialty stores are looking for fashion uniqueness and quality goods. They realize that these are the components that will help them stand out from the competition.”
Jerell cultivates its specialty store segment with an expansive in-house sales representative network that crisscrosses the country making sure specialty stores are satisfied with any one of the company’s 17 brands.
“We conduct studies to get feedback from specialty stores to make sure we’re meeting their needs in every aspect,” he said. “We have sales meetings at least three times yearly to update the sales staff on product trends. We train our sales staff on how to make an in-store presentation and how to discern the specific needs of each store. We try to be consultants instead of just sales reps.”
Jerell currently is working on a fashion basics program for specialty stores that is set to debut for spring 2001.
“Stores keep telling us that they need an item-driven basics program,” he added. “It’s something that every major store has, whether through private-label or national brands.”
Ingredients also plans to introduce an items-driven collection for spring 2001, according to Jeffrey Zipes, vice president of sales.
“We’re hearing from our sales reps and our specialty store accounts that there’s a tremendous void for separates, and we’re responding,” Zipes said.
Ingredients has a medley of tools already in place to build its specialty store business, which is about 75 percent of a total yearly volume of about $50 million and growing.
“It’s very difficult for a small specialty store to compete against the majors,” Zipes said. “We’re trying to help them differentiate themselves from the competition in their markets with fresh product that will satisfy their changing customer bases.
“The 45- to 54-year-old female consumer bracket wants product with an attitude that’s affordable and wearable. Her taste level has changed from the generation before. She’s not looking for so much traditional apparel.”
Ingredients ships specialty store orders first and takes an individualistic approach when helping stores with marketing and merchandising issues.
“We customize our in-store marketing and advertising programs to each store and their particular needs, including special promotions,” he said. “We work closely with our traveling sales reps to build the specialty store business. Timing is of the essence. Business is tough for specialty stores and they don’t want to be away from their stores. One of our greatest strengths is having nearly 10 road reps out there showing our lines and working with stores.”
Winnie Lung, owner of blouse firm K. Arnold, said specialty stores typically buy close to need, increasingly want updated styles with value, and ask for details such as classy labels and hangtags.
“Specialty stores will come and ask for things two weeks before they need them,” said Lung, “There’s more work involved in fulfilling such close-to-season requests, including speculation when it comes to some production issues. And they want that polished look, right down to the hangtags.”
As a result, wholesale prices can be up to $2 higher per garment.
K. Arnold’s business is divided evenly between department and specialty stores. The company has a signature misses’ blouse collection and an updated division called Icicle. Overall sales were about $15 million last year.
At Banyan Tree, a dress and sportswear firm in Sonora, Calif., just south of San Francisco, company president Michael Tippett has noticed the specialty store market become much more sophisticated and discerning in the last five years.
“Price and deliveries are always important to specialty stores, but product is always first in their minds,” Tippett said. “They want the most current fashion trends for their market.”
Tippett reasoned that such a mindset is mandatory for specialty stores to thrive.
“Having the trends first is the only option,” he said. “Specialty stores need to show their customers what they’re all about. They provide the customers with a fashion identity.”
Banyan Tree does about 80 percent of its volume with specialty stores, and the figure is growing, according to Tippett.
He cited an intensified focus on customer service, which includes showcasing Banyan Tree’s collections on the Internet.
“About six months ago, we started showing the collection on line,” Tippett added. “Right now, it’s purely for marketing purposes and helps stores with purchasing decisions. We may someday do orders over the Web. Right now our focus is on introducing new product and styles.”