DALLAS — By August, workers in a Palmetto’s plant in Hartwell, Ga., will be working in teams in which each member performs a variety of tasks instead of doing the same operation over and over.
The switch from bundle to modular production to enable more nimble response to market demand is one aspect of Eddie Haggar Ltd.’s strategy to maximize its January purchase of Palmetto’s junior sportswear and Essentials misses’ sportswear divisions from Hartwell Co.
Haggar more than doubled its annual volume to about $175 million when it purchased the two divisions. With Palmetto’s, it also got its first stake in the junior market. Its original EHL label specializes in misses’ moderate bottoms, including wrinkle-resistant cotton twill pants, which the company promotes under the trademark No-Wrinkle.
“We felt the Palmetto’s and Essentials labels were strong, and we also saw that Hartwell had some very good assets that could lend themselves to Quick Response sewing,” said company president Eddie Haggar Jr. He said the three labels combined have the potential to reach an annual volume of $250 million in three years.
Haggar is restructuring the company to produce and distribute its lines more efficiently and promote them more dynamically at wholesale and retail. A new showroom in New York for all three labels, scheduled to open July 1 at 1411 Broadway, will display suggested fixtures and visual merchandising for the lines.
“In moderate sportswear, the stores look terrible — it’s all racks, rounders and four-ways,” said Paul Robb, executive vice president. “Our ideas are to heighten the visual merchandising of moderate sportswear, within the parameters of the store, with banners and staggered-shelf tables for better color presentation.”
One of the first tests of the concept will be about 25 in-store EHL No-Wrinkle shops opening by June in various units of Carson Pirie Scott & Co., Mercantile Stores Co. and Belk/Leggett Stores.
Key visual display tools will be signs, a video and examples of washed pants that have not undergone the No-Wrinkle process compared with ones that have. The shops will carry No-Wrinkle skirts, shorts and pants plus wrinkle-resistant shirts.
“One of the big problems with the No-Wrinkle concept is it has been tremendously underplayed from a visual merchandising standpoint,” Haggar noted. “It just looks like another pair of pants.” In the Palmetto’s line, Haggar is banking heavily on a new style of cotton chino pants in a modified tapered silhouette that it calls Gasoline pants.
They come in 10 colors and will also be merchandised with special display materials. According to Haggar, about 250,000 units of the pants, wholesaling at $12.50, have already been booked for fall retailing.
Haggar is infusing the pants with a Fifties-style image; a tag shows a Texaco gasoline station attendant standing next to an old-style pump. When the pants get to the stores this fall, Haggar hopes merchants will place its life-size cardboard cutout of the attendant next to pants displays. It also is offering stores an oversize T-shirt screen-printed with the image of the attendant, suggested as a possible gift-with-purchase. Meanwhile, to consolidate operations of its new acquisition, Haggar moved the Palmetto’s and Essentials design and administration from New York and Hartwell, Ga., to Dallas in April. Distribution will all be running from a 500,000-square-foot facility in Hartwell by July. The company also laid off 320 of the 1,100 employees at the two new divisions. Haggar, which had contracted all production in the U.S. and Central America, got three U.S. factories in the deal plus another in Costa Rica. It closed one of the U.S. plants and is converting the other two to Quick Response plants because they are close to fabric mills in the Southeast. The QR facilities will produce sizes and colors of commodity goods, like chino pants, to replace exactly what has been sold in stores.
“We’re asking retailers to transmit sales to us once a week,” Robb said. “We have data to show that true Quick Response items generate a 40 percent higher gross margin.”
“People are buying closer to need,” Haggar added. “They buy something to wear this weekend. The consumer will tell you when to stop carrying white shorts, and it may be later than you thought.”
Haggar has made minimal adjustments to Palmetto’s and Essentials styling. The biggest change is that Palmetto’s pants are now offered in three inseam lengths — 28, 30 and 32 inches. Before, styles came in just one length.