CONTEMPORARY THREAT: CHEAP-CHIC STORES
Byline: Anne D’Innocenzio
NEW YORK — Talk about eating someone else’s lunch.
Shoppers have been consuming disposable chic like it’s going out of style, but most of their buying has been at fast-paced specialty stores, which is putting pressure on the contemporary crowd, whose raison d’etre has been churning out of-the-moment trends that are more affordable than designer-price merchandise.
Cheap chic, which has been gaining momentum over the past nine months, is only raising the stakes in the fashion-at-a-price game, with chains like Old Navy, Express and Target Stores, and European imports like Spain’s Zara and Sweden’s Hennes & Mauritz offering items like fake python leather and ruffled blouses that retail for about half of what contemporary firms offer, on average. The quality might not be as high, but that only means that women feel less guilty about tossing the pieces into used clothing bins the next season.
So, what’s a contemporary company to do? Company executives emphasize that the challenge over the next six months is to constantly stay ahead of the pack of cheap-chic retailers, but they admit it will be difficult to accomplish.
“We are definitely under pressure,” said Marc Bohbot, president of Bisou-Bisou by Michele Bohbot, which over the past six months has been devoting more of its collection to fast-fashion items.
The company is now generating about 80 percent of its business on the 20 percent of its offerings devoted to of-the-moment fashions. Last year, sales of basics versus trendy styles was more of a 50/50 mix, Bohbot said.
Bisou-Bisou is currently shipping bottoms with studs and printed pants as a key item. The company is doing well with gold fashions with sequins, as well as colored corduroy pants.
“Basic isn’t selling,” Bohbot said.
The company, which operates 17 freestanding stores, is aiming to expand its retail operation to be closer to the consumer. By yearend the company will add another three stores, and by next year, 12 more units.
Bohbot said that the company’s retail division, which ended last year with $20 million in sales, should see increases of 20 to 30 percent in the second half. Its wholesale business, which generated sales of $50 million last year, should be up 15 percent.
“We have to be faster than ever before,” said Ken Weiss, president of Easel, adding that his design team shops stores around the world. “Fashion is becoming more disposable.”
The company is expected to see sales reach $20 million this year. Next year, wholesale volume should be about $25 million.
Among the holiday items that have booked well at Easel are cashmere twinsets and woven denim.
ABS by Allen Schwartz, a division of The Warnaco Group, has been making a strong push with product extensions while growing its sportswear collection.
Schwartz, ABS’s designer director, said he expects to see sales increases of 20 to 25 percent in the second half. This year, the $50 million resource launched innerwear and shoe collections, and last month, unveiled a $4.5 million ad campaign shot by Mario Testino. The minimalist campaign, the firm’s first, is currently running in Vogue, Elle and Vanity Fair.
“This has brought us a higher profile,” Schwartz said. “It has given us brand awareness that we were severely lacking.”
Schwartz’s formula has always been based on his aggressive chasing of items, and turning them out quickly. This fall, the company’s most popular looks among buyers are flared pants and printed skirts.
The company is also casting a wider net with a new line called Allen by ABS, which is 30 to 40 percent less expensive than its signature line and has a more forgiving fit.
For fall, for example, ABS will offer skinny flared jeans, which retail for $199. Allen by ABS’s version, which has a fuller cut, retails for $98.
The lower-priced line will be in 300 doors for fall, and has the potential to be in 800 doors. The ABS signature collection is in approximately 1,500 doors.
The company is also pegging future growth to its retail operation. The company operates seven freestanding stores, but Schwartz believes there is a potential for another 40 to 60 units.
As for its international plans, ABS is looking to open stores in London, Italy and Japan, though no leases have been signed.
Some smaller companies believe they have a distinct advantage over some of their larger competitors when it comes to serving up fashion.
Take Sharagano, whose manufacturing and design operations are based in Paris. The company, which generated sales of $18 million last year, ships new deliveries every three to four weeks, according to David Shamouelian, vice president and co-founder. About 90 percent of its business is from the United States.
“I think the contemporary market is losing focus,” he said, noting that the market is getting hit by other players at all price points. “It’s not aggressive about going after the trends.”
The company, which moved from tailored clothing into contemporary two years ago, does about 75 percent of its business in fast-turnaround items. The lineup for fall and holiday includes stretch gingham pants, beaded apron tops and stretch jeans.
The company has a freestanding retail store at 529 Broadway and plans to open a store this fall at Roosevelt Field in Garden City, Long Island. Next year, the goal is to have a total of 20 new stores.
Kenneth Zimmerman, president of Kenny Z, which produces contemporary labels Emma Black and Zola Nights, admits that the cheap-chic trend is putting more pressure on the firm.
“The whole market is jumping on [contemporary], from Target to Express,” he said. “We have to get it to them before they do. We have to constantly be inventing new styles.”
Emma Black, which will be in 350 doors for fall, offered items for fall such as embossed velvet, leather pants, and beaded tops and pants, according to its designer, Emma Black.
Kenny Z sales this year should total about $17 million, with Emma Black generating about $7 million. Its Zola Night line, an eveningwear collection, makes up the remainder.
Zimmerman said he’s learned from his tough lesson at Kenar, which didn’t control its distribution and was forced into bankruptcy.
“I want to grow my business slowly, and focus on selected doors,” he said.