WITH THE PRESSURE ON, FIRMS PUSH INTO RETAIL

Byline: Melanie Kletter

NEW YORK — The contemporary market has been roughed up a little lately by fast-growing, cheap-chic retailers such as Hennes & Mauritz, Limited Express and Zara, but contemporary vendors are fighting back with an aggressive store strategy of their own.
BCBG Max Azria, French Connection, Maxstudio.com, Bisou Bisou and Betsey Johnson are among the firms opening retail units, which give them more control over the presentation of their merchandise, as well as their overall message to consumers. These stores are also often more profitable than wholesale operations, executives said.
At the same time, the contemporary crowd is also churning out fashion faster due in part to the success of newer, more moderately priced chains such as H&M — set to open its second Manhattan store Friday on West 34th Street — which spit out fresh fashion trends at a dizzying pace. Many contemporary firms are reducing their amount of basic apparel to focus on more of-the-moment, directional items, and in turn reach a wider audience.
While the pressure is on from the lower tier, overall the contemporary sector has been helped by consumer demand for fashion-forward clothes that are trendy but less expensive than designer and bridge looks.
Vendors and merchants said the category is also being helped by increased purchases from teens, who often prefer the higher-priced looks offered by contemporary labels, supplementing more junior looks with those from contemporary resources. At the same time, body conscious women of all ages are snapping up contemporary brands, which often offer youthful interpretations of trends.
“We have seen really strong sales lately,” said Stacey Pecor, an owner of Olive & Bette, a three-store chain in New York that sells contemporary labels. “September was our best month ever. We were up 36 percent for the month.”
She attributed the gains in part to her stores’ product offerings, which include a wide range of sexy and “girlie” looks, while many retailers are focusing on bold graphics and darker color palettes. Business has been so strong that Olive & Bette is planning on opening a fourth store in November on Spring Street in Manhattan’s SoHo district, and the firm has also added more distribution to its catalog.
Marc Bohbot, chief executive of contemporary firm Bisou Bisou, said he believes the category is thriving because, “The designer prices are too high and many women who want to feel special will look to contemporary.”
While opening their own stores seems to be a key method for growth, companies are taking a multi-pronged approach heading into spring, including adding divisions and expanding into fresh categories to keep up the momentum.
Fashion for the spring is shaping up as a continuation of key looks for fall, such as ladylike styles and more body-conscious pieces. Pastels and bright colors are elements of many new lines, and textures continue to be important. Many vendors are carrying leather and suede fabrics into the spring season, even though they are traditionally fall and holiday staples.
Trends are also focused on flowers and pastels, as well as continued interest in ladylike looks such as wrap dresses, suitings and blouses. Embellishments will also continue to be key, and beads and rhinestones are incorporated into many new lines.
“The shirtdress will prevail,” predicted Allen B. Schwartz, design director of ABS. “Knits and crochets are important, and be ready for a lot of leg. Short, sexy dresses are making a comeback.”
ABS currently operates seven retail stores, and while the company doesn’t have any new units planned right now, Schwartz said he sees “a lot of potential” for ABS retail, and will likely begin to focus more on retail in 2001.
Bisou Bisou is focusing on building up its retail business, said Bohbot. The Los Angeles-based firm opened its first freestanding unit six years ago, and it now operates 18 stores. Two more are scheduled to open this year in northern San Francisco and in Denver.
“Opening stores is a very important way for us to have control of the product and the brand,” said Bohbot. “It also helps build awareness and helps with the development of the wholesale aspect of the business, but overall, retail has nothing to do with wholesale.”
On the wholesale level, Bisou Bisou is now sold in about 500 doors, including 100 department store units.
Licensing is becoming a more important part of Bisou Bisou’s business. The firm currently licenses outerwear, swimwear and shoes, and it will launch intimate apparel at retail this spring. Bohbot said the firm is looking at starting a handbag line, but has so far not signed any deals.
Meanwhile, BCBG Max Azria is further developing itself as a global brand, and has been expanding more on the international front. The company now operates stores in locations such as France, Mexico, Venezuela and Israel, and the firm plans to open between 16 and 18 new stores next year, said Max Azria, president and owner, in a phone interview.
“We are accelerating our store-opening program,” he said. “The retail business has been doing great for us.”
The 11-year-old firm is also entering new categories this spring, including a line of fragrance and beauty products to be produced by Unilever Cosmetics. Azria said the company is “lifestyle” focused, but has chosen until now to produce most of its other products in house, and not on a licensed basis, in order to have more control. Among its wide range of product offerings are swimwear, intimate apparel, handbags and shoes. The firm is also pursuing numerous other avenues for growth, including its nearly one-year-old private brand deal with Nordstrom, and its recent announcement that it has taken a stake in Algo Group, the Montreal-based multi-label dress and sportswear company.
French Connection, another contemporary firm with retail and wholesale operations, is also focusing on retail for spring, said Michael Axelrod, ceo of French Connection in the U.S. The firm has recently opened units in Las Vegas and in the Georgetown section of Washington, D.C., and another store is planned this spring in San Francisco.
“We try to keep a good balance between stores and wholesale,” said Axelrod in an interview at the company’s spacious headquarters on Seventh Avenue in New York. “Also we have focused on building up our in-store shops.”
For spring, the firm is pushing denim, which it entered in a significant way about eight months ago. Denim is being presented in a variety of styles and shapes, including coated looks. Other key styles for spring include the colors cranberry and green, skirts with inverted pleats, and belted trenchcoats.
Maxstudio.com is also garnering growth by opening new stores. The firm now operates 20 stores, including its new store in Las Vegas.
“Retail stores are a highly profitable segment,” said Leon Max, founder and owner. “There are many department stores and we don’t want to sell every store.”
Maxstudio’s spring selections include plenty of ladylike styles, such as georgette blouses and tailored looks. Its dresses are now being sold along with sportswear, and some dress styles on tap include belted styles and a fake suede dress that is machine washable. Miniskirts in a variety of prints, and sweaters, which have seen considerable strength this fall, are other key areas.
Maxstudio.com is also looking to expand its reach in specialty stores. The label is now sold primarily in department stores, as well as its own stores, and it wants to expand its presence in the specialty store arena, according to LaCretia Richardson, an account executive.
In addition, the firm is also entering new categories, and will launch at retail a licensed collection of eyewear produced by Evolution eyewear, and is also mulling over other licensing deals, according to Richardson.
The firm changed its name last year from simply Max Studio to reflect its inroads in cyberspace, and it is now using the maxstudio.com logo in all its apparel. The firm sells product over the Web and also offers touch-screen kiosks displaying its full range of merchandise.
“We want people to know we have the Web site and it is a good way for us to be visible,” Max said.
Betsey Johnson, which staged a lively spring runway show featuring fashions worn by Playboy models, is another contemporary firm making its mark as a retailer. The company is on track to open 10 to 12 stores in 2001, said Catherine Nation, executive vice president of retail and marketing. The firm now has 38 stores, accounting for about 35 percent of sales, which are on track to reach about $50 million this year, according to Nation.
“We are keeping our inventory clean and we are not markdown driven,” Nation noted. “We have seen our margins go up dramatically and we are buying less.”
Going forward, most of the new stores will incorporate the firm’s new store design, which is sleeker and more minimalist and features pink walls, aluminum lighting and silver fixtures, according to Nation.
Betsey Johnson’s fashions for spring include plenty of chiffon and classic floral prints, as well as newer print motifs such as leaves and geometrics. More solid colored pieces are on tap for spring, and for the first time the company is also introducing printed floral denims.
The company also expects growth to come from its new girls’ collection, which carries similar styling to the core line in smaller sizes and higher necklines. The collection carries retail prices of $98 to $150, made its debut in Saks Fifth Avenue and is also being rolled out to specialty children’s stores. Its evening collection featuring dressier outfits is also expected to fuel growth this spring, according to Kim Higley, executive vice president of sales and distribution.
Bette Paige, a contemporary firm based in City of Industry, Calif., is focusing on knit tops in a variety of colors, many of which feature lively geometric prints. The four-year-old company offers a variety of silhouettes, such as scoopneck tank tops, mock turtlenecks, and scoopneck sweaters, and much of the line is fitted and body conscious. Fabrics include novelty rayon yarns and Lycra spandex, and many pieces feature embellishments such as hand-crocheted trim.
“We are taking yarns and mixing them,” said Phyllis Cohen, vice president of sales. “Everything is novelty, with a variety of textures and prints.”
Wholesale prices for the line average about $50, and run from $39 to $85.
Among the newer players in the contemporary scene is Kenneth Cole, which is powering ahead with its first foray into women’s wear. In addition to the better line Kenneth Cole New York which hit stores this fall, the designer has launched a collection of contemporary apparel under his Reaction label, which will reach department stores this spring.
Reaction is comprised of 20 percent denim offerings, including gold jeans and denim with foil treatments. The rest of the line features casual basics, such as black cropped pants and more directional pieces like a hot pink leather shorts with a matching jacket and a suede patchwork skirt.
Other key fabrics include stretch nylon and stretch Lycra spandex, as well as coated cotton. Many of the pieces feature prints, including flowers, stripes and small checks. The colorful line includes apparel in cornflower blue, purple, lime green and white. Embellishments and treatments, such as lace edges and ruffled sleeves, add femininity to some pieces.
While they all don’t own their own stores, other contemporary firms are making a brand push for spring.
Designer Beverly Mehl is launching a new label for spring called Violetta, which includes a range of sportswear, including sweaters and tops, as well as dresses and suits. The line carries wholesale prices of between $75 and $175, and features fabrics such as linen, satin and twill.
Shu Shu, a tops-driven company, is focusing on sweaters in a variety of colors for spring, according to Mark Stevens, vice president of marketing. Many of the sweaters have small details, such as a lace-up neck and geometric prints. The materials include stretch Lycra and cotton blends.
Shu Shu is now sold in boutiques and specialty stores, and company executives are looking to extend the brand into department stores, and are also planning to diversify into new categories such as bottoms and wovens. Wholesale prices range from about $30 to $50.
Essendi, also a New York-based tops company, is offering a range of silk and Lycra tops, including some with beads and embellishments. Tank tops continue to be a popular look, especially styles with deep cut-outs in the arms and racerback looks. The four-year-old company is also offering a smattering of bottoms, including nylon skirts and pants in technical fabrics.
Drama, a New York-based contemporary company focusing on bottoms, is increasing its emphasis on texture and color.
The firm is carrying more microfiber and prints, and has also added some accessories, according to Roger Cohen, owner and president of the firm. The company’s wholesale prices range from $59 to $89 for bottoms, $129 for jackets, and $79 for evening separates.
“Everyone understands the trends,” said Cohen. “Chains such as Old Navy and H&M have made contemporary looks more affordable. Now there is almost a backlash, and the wealthier customer wants to set herself apart.”
Now sold in about 1,000 doors, Drama is aiming to increase its distribution in boutiques and specialty stores and is also expanding more into eveningwear.
Silk Box by Lotusa has opened a New York showroom at 209 West 38th Street. The five-year-old firm offers a variety of silk and silk blend yarn designs, including novelty pieces and capri pants and jackets. Produced primarily in China, Silk Box apparel carries wholesale price points of about $45 to $125.
The company is targeting primarily specialty stores and better department stores for the collection, said Boyd Babbitt, sales manager and design director of the company.

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