FEELING THE PINCH

Byline: Anne D’Innocenzio

NEW YORK — Rising gasoline prices, a jittery stock market and rising interest rates are just some of the pressures that moderate manufacturers believe could make selling apparel at their level more challenging during the second half of the year.
To spark spending among their core middle-income consumers, who are usually the first to be hit by rising prices and economic slowdowns, company executives are implementing strategies such as shipping initial spring goods in October, a month earlier than usual, and reducing prices on certain key items.
“The consumer has been squeezed,” said John Paul Beltran, co-chief executive officer of John Paul Richard, a manufacturer of updated sportswear. “She has less disposable income. The stock market is going up and down. She has also been buying more home products and spending her money on big-ticket items like computers.”
The company, which posted sales with $122 million last year, is projecting single-digit increases. For holiday, the company is reducing prices by five to 10 percent on key items as a way to spark sales.
“We see the stores’ private label programs becoming more of a threat to us,” said Beltran, citing lines such as Federated Department Stores’ Style & Co. and May Co.’s Amanda Smith. Jackets will wholesale for about $28.
Nevertheless, Beltran is optimistic about fall and holiday fashions, noting that a strong blouse trend, in particular, should help drive sales.
“We are showing it with a lot of suity pieces,” Beltran said.
Michael Sands, president of Lasting Impressions, which produces the Tofy label, admitted that business will be difficult. For the second half, he is looking at sales to be flat to 8 percent ahead. The company posted sales of $40 million last year.
“Business is tough,” Sands said. “People are getting a little conservative.”
Lasting Impressions is banking on career casual, which continues to be strong, as well as knits and prints, which have been “sensational,” Sands said.
He also pointed out that the overall apparel business hasn’t been consistent at retail, making it hard for manufacturers to develop merchandising plans.
Hal Upbin, chairman, chief executive officer and president of Kellwood Co., agreed that the consumer is under pressure, but he is optimistic that the environment will begin to stabilize.
However, John Henderson, Kellwood’s vice president of merchandising, noted that the company is up against tough comparisons for holiday. Kellwood did make adjustments and is not showing as many dressier looks for holiday, he noted. Henderson added that he is seeing strong bookings in holiday motif sweaters.
The overall goal, Upbin said, is to continue to build sales for its portfolio of brands by layering on different product categories.
“We are looking at a high single-digit increase, about 8 percent,” he said.
Upbin pointed out that the company has benefited from recent moves by J.C. Penney Co. and Sears, Roebuck & Co. to streamline their vendor structure, giving more attention to major resources.
One of Kellwood’s key brands, Sag Harbor, a $700 million label, will be launching its first national TV ad campaign for fall, a rare move for a moderate brand. The campaign will showcase Sag Harbor’s roster of licensed products, including shoes, watches, jewelry, scarves, sunglasses, hosiery, coats and jackets.
For next spring, Sag Harbor the label will be unveiling an eveningwear line, followed by a fall 2001 launch of a suit collection.
As for Kellwood’s plus-size business, the company is banking on its partnership with Emme, the plus-size model and host of E! Fashion Emergency. The Emme plus-size collection will be in 50 doors for fall, according to a company spokeswoman. The line, which offers contemporary styling at moderate prices, will be expanded distribution for spring. This fall, Emme will be making in-store appearances at Lord and Taylor, Dillard Department Stores Inc. and at Saks Inc. stores.
Bob Salem, marketing director at The Leslie Fay Cos., is counting on “compelling product” and early spring deliveries to spur consumer spending for the next six months. Spring merchandise will be in stores for October, a month earlier than usual.
“Apparel has been under pressure for a long time,” said Salem. “We feel we are not just competing with traditional competitors, but with electronics. [Women] are now surfing the Net, and they are spending their money on computers.”
Salem projects that the company will generate mid to high double-digit increases in the second half.
“Our customer is becoming more sophisticated,” he said. “Customers want less embellishment.”
For fall and holiday, the company is showing head-to-toe velour dressing, including bomber jackets, as well as gabardine pants. Leslie Fay is also adding more fixtures in the stores to “add more clarity to Leslie Fay’s presentation.”
Ken Coniglio, vice president of sales at Ingredients, said that the past spring and summer seasons have been difficult. The company went too heavily into embroidered looks, which had a limited appeal to the moderate consumer.
For fall and holiday, the company is cleaning up its looks and chasing after classic suits and clean pleather pants.
Coniglio expects sales to increase by 10 to 15 percent for the second half.
Last year, the company, which produces private label and markets the line Ingredients, generated overall sales of $40 million.

load comments
blog comments powered by Disqus