NEW YORK — The battle is on.
Faced with a still difficult retail climate, moderate sportswear firms are going forward with new strategies — from branching into new lines to revamping their fashions — to keep their businesses afloat.
In some cases, these firms say they had no choice. They had to change merchandising plans now, or watch sales erode even further.
Take, for example, Gepetto Inc. in Hialeah, Pa. Over the past year or so, the company has dumped its department store accounts in favor of specialty stores.
“Department stores were becoming too demanding, constantly asking us to lower our prices,” said Frank Seidman, director of marketing and national sales manager. “So, we had a choice: either make a better garment and cater to specialty stores or cheapen the garment and fight it out with imported garment programs.”
Its department store business, which accounted for 45 percent of sales only two years ago, now accounts for only about 2 percent. Virtually all its business is done through some 5,000 specialty accounts, primarily mom-and-pop stores.
“This has definitely paid off,” said Seidman, noting the company has seen a 15 percent sales increase within a year. He projects sales will top $15 million by the end of 1996.
The company’s early fall line includes cotton and bouclA terry, instead of the polyester cotton jersey it previously featured. Gepetto is also showing fringed lace, gingham checks and printed gauze. For fall, items include skorts and shells with attached vests.
Through better sourcing strategies, Gepetto was able to keep price increases to a minimum — about 5 percent, Seidman said. Its average wholesale price is $18.50.
To keep from going under, O’Brien Sportswear, a moderate maker, merged in June with Highway West, another moderate sportswear house.
The new company is called Select Clothing Co.
“I never saw economics affect my business the way it did in 1995 — too many stores and customers were confused,” said Erwin Pittock, president of Select, who was president of O’Brien before the merger. “We had to join forces to cut expenses. Otherwise, we were on the way out.”
With the merger, Pittock noted, about 20 percent of Highway West’s staff was cut. Both companies’ facilities were closed, and operations were consolidated at a new facility with a much cheaper rent in downtown Los Angeles.
“We’re gearing up,” Pittock said. “We’re getting a lot of orders from stores. I think we will be the beneficiaries of some of the closings of moderate firms.”
Pittock expects Select to post sales of $7 million by the end of 1996.
O’Brien Sportswear had generated $8 million in sales, while Highway West had posted about $4 million in sales in the most recent fiscal year.
To cater to an increasingly demanding consumer, Jantzen, a division of VF Corp., is adding value to the garment, according to Sue Locke, merchandise manager.
“We are adding more details to the garment, like buttons, embroidery and trims,” Locke said. She noted Jantzen is maintaining prices by “watching expenses.”
Jantzen, which appeals to a 45-plus customer, is touting cotton and polyester twills, challis prints and rayon crepes for the early fall line.
The company is stepping up consumer research, sending its sales staff to selling floors to talk with consumers.
“We are trying to find out what they are missing and what they want,” she said. “One thing we found is that they want more options than pull-on pants.”
The company is now making plain-front pants with side and back elastic.
Dimanche Inc., a casual and career sportswear firm here, is refining a merchandising strategy implemented four years ago.
At that time, the company reversed its 70/30 ratio of private label to branded apparel. Since then, it has continued to update its fashions marketed under the Dimanche label and recently has branched out with DC II, an embellished knit and separates line, which will be in stores by mid-February.
“We’ve been constantly bringing in new fabrics and new prints,” said Marla Arbuse, national sales manager. “This is key. Business is tough. There are all these layoffs at corporations, and we have to work twice as hard.”
For early fall, the company, which targets the 30-plus woman, is showing cardigan sweater jackets with rayon jacquard pants. Wholesale prices are about $20.