PUTTING WIND IN UPSCALE SALES
Byline: Eric Wilson / With contributions from Alessandra Ilari, Milan
NEW YORK — A meteorologist might predict the designer and bridge segments are in for a collision of negative forces this fall on the scale of “The Perfect Storm,” with high-profile lawsuits, complaints from retailers of dull spring fashion, concerns about the economy and even threats of cashmere tariffs and shortages converging.
Yet the captains of this industry are plotting a course for smooth sailing through the fall and holiday retail seasons, with sizable sales gains and a clear mission before them: to focus their energies on increasing sales of full-price merchandise for greater profitability.
It might sound weirdly naive to say that these vendors have suddenly and collectively stumbled across this theory of emphasizing “quality over quantity” salesmanship, but in interviews with companies of a broad variety of stylistic and corporate philosophies, it has become clear that the necessity of improving the healthfulness of how their designs are sold has become a higher priority than building sheer volume.
For many of them, it is driven primarily by a desire to become more important players to department stores, as the consolidated retail landscape continues to become increasingly competitive. With stores like Saks Fifth Avenue, Bergdorf Goodman and Bloomingdale’s turning more attention to emerging designers, there’s also a greater risk that stores are less willing to carry a vendor through an underperforming season.
Even though the luxury sector was largely spared during a difficult spring season, capped off by dismal June sales reports last week, there are still signs that stores are more cautiously reconsidering their fall and holiday plans in higher price points. So the mantra among vendors has been to increase the profitability of their sales, for which they are working with their retail partners on mailings, sales associate incentives and in-store promotions to nail full-price purchases this fall.
“We are looking at business store by store,” said Mark Mendelson, president of Tahari. “We are partnering with stores on mailers and coming up with creative ways to generate better sell-throughs and drive regular-price business.”
“It’s a modern way of thinking about the quality of sales,” said Maria Viccaro, president, since February, of Apparel Group International, which holds the Oscar by Oscar de la Renta bridge sportswear license.
“You’ve got to get floor space, market yourself well, and be attentive to consumers’ trends and needs,” said Kim Perrone, co-chief executive officer of de V&P, which recently relaunched the Emanuel/Emanuel Ungaro and Adrienne Vittadini collections.
“It’s now about being the best in every way and being an advocate for yourself,” she said.
Despite the forces working against them, there are also coincidental ones happening in their favor. There’s fashion on their side, as in the return of the jacket, the return of the blouse and the return of ladylike dressing — all trends that will require fashion-minded customers to make “investment” purchases in high-priced goods. Several resources said a focus on ensemble dressing will also help sales of related items, while others said an interest in key items will drive sales.
Either way, manufacturers have a number of new initiatives on the drawing boards this fall to help continue their upward momentum.
Tom Murry, president and chief operating officer of Calvin Klein — which is embroiled in a legal battle with its largest licensee, Warnaco — said that in the company’s designer business, “we expect consumer confidence to strengthen during the second half of 2000.
“Sophisticated jacket-driven looks will do well,” he said. “For us, at the collection level, there will also be an expansion of evening. We expect to do very well with evening dresses during the fourth quarter.”
In bridge, the firm has refocused its CK business, Murry said, noting the company had a strong first half in 2000 and expects even better results in the second half. “Right now, the business is increasingly jacket driven, which works to our advantage.”
Robert Duffy, president of Marc Jacobs, is planning fall business ahead based on several initiatives the company has undertaken, including the launch of its handbags and accessories business. Jacobs’s shoes and men’s wear have also been particularly strong categories.
“My business has been really strong and exceeding plan in my own store [in SoHo] and at wholesale,” Duffy said. “We’re planning on increasing doors in women’s ready-to-wear and planning a new store in San Francisco on Maiden Lane. I’m going full force right now.”
The company is also launching a secondary line called Marc, scheduled to launch for spring 2001 with Carolyn Risoli as its president, as well as a license for fragrance in the works with Parfums Givenchy.
Anna Sui has booked fall orders up at least 30 percent over last year, according to Michael Pellegrino, president. “That growth has really come about in the U.S. part of the business,” he said. “We’re in more of the branches of the majors, as well as picking up some more specialty stores.”
Also, Sui’s sales have grown in Europe by participating in the Tranoi show for two seasons and in Japan through Isetan, its business partner there that operates freestanding Anna Sui stores, as well as expanded product lines.
Anna Sui is also putting together a team to develop its own Web site, which will likely feature e-commerce capabilities. After listening to several presentations from outside vendors and multibrand sites, Pellegrino said the company decided to go on its own in developing a site.
The firm is also marketing its jeans classification more aggressively and is still eagerly searching out a partner to develop that business as a joint venture or license.
Michael Kors’s showroom sales and trunk shows have combined to make its best fall season with a 50 percent growth over last fall, said Barbara LaMonica, president, adding that sales growth of the Kors bridge collection has mirrored the designer collection.
“If there is something fabulous and new for the customer to buy, the economic climate does not affect her purchasing power,” LaMonica said.
Fur and feather-trimmed jackets and coats, leather pieces and paillette tops and gowns have all done particularly well, while staples of cashmere sweaters and double-face pieces have continued to be strong. The company is also gearing up to launch an accessories collection and has licensed Schwartz & Benjamin to launch a shoe collection and Le Tanneur & Cie to produce a handbag and leather goods line.
And Kors is opening a flagship this fall on Madison Avenue.
“Obviously, we are looking for major growth from our new products, as well as our store, which we project will perform very well,” LaMonica said. “Additionally, our rtw growth over the next year will come from international accounts, as well as greater depth of product in existing accounts.”
Joann Casa, executive vice president of Tse, said the company is looking at strong increases for its brands over the next six months.
“Both specialty store and major businesses are up over 25 percent year-to-date and we expect that trend will continue through the second half, based on bookings,” Casa said.
Color, modern silhouettes and year-round tropical wools, super fine wools and cashmere are expected to be strong for fall. Stacey Perlick, vice president of sales at Tse, added that color-blocked cashmere knits and wovens, reversible Fair Isle cashmeres and map-printed cashmeres are strong in the Tse New York collection, while popcorn prints, v-necks and novel twinsets are strong in the Tse line.
Casa said Tse’s biggest business concern is a challenge facing all knitwear producers, the impending crisis of a cashmere fiber shortage.
“We have taken steps to ensure that we will have continued access to the raw fiber,” she said. “Tse has recently succeeded in establishing an agreement with the Chinese government that will protect Tse’s supply.”
For fall, Tse is also launching its first umbrella ad campaign featuring its four labels — Tse New York, Tse Men and Women and Tsesurface — in a 12-page insert with a 78-page media schedule, up from fewer than 20 pages last fall. Tse Men will launch a full designer sportswear collection for fall 2001, and wovens will take on a more important role in the development of its women’s line and Tsesurface collections that season.
“The indication is that the business is strong and healthy, and we see it continuing through the rest of the year,” said Nickelson Wooster, president of John Bartlett, one of the companies identified as a likely takeover target by Pegasus Apparel Group, which has acquired Pamela Dennis, Daryl K and Miguel Adrover this year.
“The collections have been on target, and there is an overall increased interest in designer collections,” Wooster said.
Among the key looks expected to drive sales are leather looks, intarsia cashmere and houndstooth woven pieces.
The firm expects to meet its fall deliveries. That collection was the last to be produced by Byblos, with whom Bartlett broke off its licensing agreement in February. They are now searching for a new manufacturing partner.
While Wooster would not comment on the status of negotiations, he said the company will stage a spring 2001 fashion show featuring Bartlett’s men’s and women’s collections at Bryant Park in New York and produce them independently through an agent in Milan.
“It’s a good moment we’re in after a rough spring,” Wooster said. “The retail landscape is only becoming more competitive, which is the reason why we need a good strategic partner to help us ship on time and at reasonable prices. We’re able to do that independently this season, but for the long haul, we need a strategic partner.”
New York-based men’s wear designers Richard Bengtsson and Edward Pavlick have also just shown a capsule collection of 11 women’s looks under their label, Richard Edwards, in Milan.
The pieces are a litmus test, since the designers felt that with the men’s wear experience under their belt, the time was ripe to try their hand at women’s.
Apparel Group International’s Viccaro said customer interest in jackets and ensembles at higher price points will help increase regular price sell-throughs and enhance the firm’s retail sales volume because of related purchases.
Wool and cashmere blends, lightweight wools, heathered melanges and some technological fabrics are expected to be key in the jacket classification.
Oscar by Oscar de la Renta’s retail sell-throughs and volumes have improved since its year-ago figures, she said, noting that for spring the company experienced a growth of 10 to 15 percent in full-price sales. The bridge collection is also being included in a three-page advertising insert by the Oscar de la Renta company in the September issue of W, which Viccaro expects will result in heightened visibility for the firm.
The bridge licensee is also instituting a sales campaign called “Return to Fall Chic” with its key stores to strengthen sales associates’ awareness of what the company is doing to improve the line. It includes an incentive contest for the sales associates, as well as a gift-with-purchase promotion featuring an Oscar canvas bag for any regular price purchase of $750 or more, launching with Saks, Aug. 24-25.
Lafayette 148’s president, Deirdre Quinn, said the company has continued to grow at a rate of 25 percent per season for several seasons, which she expects to continue for fall.
“We’re putting depth into certain areas, such as blouses, which are very strong right now,” Quinn said, adding that wrap and ruffle styles have been standouts at fall trunk shows.
Wendy R. Chivian, president of Anne Klein, said the return of the polished ensemble look and the strength of luxury as a trend stand to bolster the firm’s fall performance. She projected that shearling and leather with exotic python treatments are going to be key looks in its apparel category, as well as for handbags and footwear.
While Anne Klein’s focus is toward career and evening, with decorated, embellished and embroidered looks, the A Line Anne Klein collection includes more casual components.
“We are putting them together in more and more stores so that in almost every location the lines complement each other rather than compete,” Chivian said.
Anne Klein is also building on strong growth over the past season of its quick replenishment program, which includes several key silhouettes from both collections sold under the label AK Anne Klein, by incorporating more styles such as denims and twills for fall.
“I’m feeling very good about the bridge business, because our spring business has been excellent,” added Mikki Thomas, vice president and general manager of Dana Buchman.
The key area for the bridge line has been in special occasion dressing, with strong sales of looks made with embellished fabrics and fabrics with color and shine.
“There are reports that the bridge business is doing well overall, and whereas it has been softening in the past month, I don’t see that as an overall trend for bridge, going forward,” Thomas said.
She also cited the return of the jacket and ensemble dressing as important for the category and added that in its dress division, Dana Buchman has changed its concept to focus on dressy separates, “meaning sportswear-inspired dressy pieces.”
Tahari is also bullish on fall, despite complaints about spring business.
One problem with spring was that a lot of the key trends were not wearable by a vast array of customers. A particular flop from spring was the ruffle trend, which was not flattering on many women.
“For fall, it’s a great jacket that’s more wearable to a greater population,” added Christopher LaPolice, president of sportswear. “Dressed-up is better for everybody and it hits a wider range of customers.”
Tahari is also focusing on non-product issues, including the quality of its sales, Mendelson noted, citing corporate sale days and partnerships with retailers on customer mailings.