Has Victoria's Secret Become Too Sexy?

Victoria's Secret, the lingerie company that introduced the Very Sexy bra, the Fantasy Bra, and the Internet server-crashing fashion show, has become "too sexy" for its own good, its top executive said.
"We've so much gotten off our heritage ... too sexy, and we use the word sexy a lot and really have forgotten the ultra feminine," said Sharen Turney, Victoria's Secret's chief executive, in a call with industry analysts. Victoria's Secret was launched with the idea that Victoria was manor-born and lived in London, Turney said. "I feel so strongly about us getting back to our heritage and really thinking in terms of ultra feminine and not just the word sexy and becoming much more relevant to our customer," Turney said Thursday. Turney said Victoria's Secret has gotten younger with a strong focus on its successful Pink line of lingerie and loungewear created for college-age women, and has tried to chase those customers. Turney said Victoria's Secret wants to increase its level of sophistication. "We will also reinvent the sleepwear business and focus on product quality," she said. "Our assortment will return to an ultra feminine lingerie brand to meet her needs and expectation." Sales at Victoria's Secret, like many clothing retailers, have been slipping. Victoria Secret's parent, Limited Brands, said Wednesday that its fourth quarter profits fell 12 percent and that its first quarter earnings would come in below Wall Street expectations.
(sourced from the AssociatedPress-online)

U.S. Stores Cut Back on European Buying

European shoppers visiting the U.S. are certainly getting a better deal for their dollars, due to the euro's higher-value, compared with the U.S. dollar. But in the months ahead, they might have a tougher time finding European labels in specialty stores. With the greenback hovering near an all-time low, several domestic retailers are cutting back on their European buys and in some cases, dropping labels entirely to try to stretch their dollars. On Monday the euro's exchange rate to the dollar of $1.4836 was not terribly far from last November's low of $1.4967 per euro, the weakest level since the European Union's currency made its debut in 1999. Of course, this news also means that American designers who source European fabrics are seeing prices creep up. Christine Bailey, co-owner of Barbara Jean in Little Rock, Ark., said she has sliced her fall European buy in half, dropping Prada and Dolce & Gabbana. Along with the exchange rate, the minimums were too high to justify the store's sell-throughs and Dolce & Gabbana's fall collections used fabrics that are too heavy for the local climate, Bailey said. "We are cutting back tremendously in designer sportswear entirely because the prices are too high. Customers are just not buying that like they once did," Bailey said. To try to keep their customers as shoppers, some stores are searching for more timeless pieces that won't look dated after a few seasons. Others are looking for more unusual styles that will justify a high-ticket purchase. Sara Albrecht, owner of Ultimo in Chicago, said she has been paying close attention to the descending dollar for the past three or four seasons and is spending a little less on European labels. But even in the instances when she is spending the same amount of dollars on a European collection, she is getting fewer units due to the exchange rate. With that said, Albrecht, who carries such labels as Gio Guerreri, Karl Lagerfeld, John Galliano and Piazza Sempione, said all her European vendors "have been great about understanding the issues and are very willing to work with me to make sure we have the best possible selling season. Some are sending things on approval, not enforcing minimums, taking returns and trying to maintain their prices by changing production or eating some of the margins." "I'm paying more attention to local designers and to designers in New York. I'm looking at things that I would never have probably looked at before," she said.
It s important to note that, there's still a price-value relationship to the customer' therefore, retailers dealing in high-end products are seeing a less-affected customer.
(Sourced from Rosemary Feitelberg, WWD.com)

The Bionic Consumer

According to the Cotton Incorporated Lifestyle Monitor™, women are spending less time and money shopping for clothing than they did a decade ago, and yet they are still deriving the same level of enjoyment from their beloved 'sport.' In 1998, the typical female consumer spent 53 minutes and $39.00 on her average shopping trip for apparel; in 2007, that same consumer spent only 46 minutes and $35.17 on a typical jaunt. What is behind today’s consumer’s super abilities and agilities? “Women are better educated today,” suggests Chad Jackson, Marketing and Public Relations Manager for Evisu, a premium denim label. “Before, you had to be in the industry to gain fashion insight, but these days, average women are exposed to the tools of fashion through [online] media and are empowered with knowledge, a modern fashion vocabulary, and industry insight. There is more research available allowing women to plan out their seasonal wardrobe ahead of time, which saves both time and money.” Knowledge is certainly power, but consumers appear to be getting a fair assist in their shopping-conquests from retailers themselves in the form of multiple retail-channels and outlets, couture-like styling at very desirable price points, as well as through frequent and aggressively-advertised sales, (to name just a few factors.) One of the most widely-used vehicles in today’s multi-channel shopping arena is online retailing. According to the Monitor, in 2007, 52% of female respondents said that they had browsed the Internet for clothing, up considerably from just 7% doing so in 1998. Today, when this consumer logs on, she spends approximately an hour and a half browsing for apparel in a given month. (A statistic that is rising parallel to the amount of online-apparel purchases, as well.) Additionally, a variety of stylish fashions at virtually every level of retail. “Luxury brands are flooding all price ranges with products today,” observes Chris Kensler, Editorial Director for Stylehive, a global social shopping community. “In the past, you would have to spend thousands of dollars to get a specific style, now you can get a very similar looking piece for perhaps fifty dollars, (though it may not last as long, or consist of the best fabrications.) “Women are savvy about interpreting the styles they see in stores and making them their own with a little attention to the details,” says Kathryn Conover, a dress designer with an eponymous label sold at Lord and Taylor, Nordstrom and Dillards. “It’s not about fast fashion for all women, but about personal style with polish and individuality.” A trained mind and an abundance of resources and incentives go a long way in assisting women with scoring the goal of getting more for their [shopping] time and money in style; thus, helping women earn the mantle of “super consumers”.
(-Cotton Incorporated, 2007)

What To Wear This Spring

The shirt Dress:
Floral-Bright Prints:
Long-Day Dresses:
Trench Coats (of course):

Online-Shopping Innovation at its Finest

When recent trend-research showed customization as 'the next big-thing in luxury,' they were right on target...

Sure, you can hire your own dressmaker, tailor and shoemaker — if you have the money (and the time); the rest [of us] turn to the Internet, where online customization and personalization of apparel and accessories is growing. Sport-shoe retailers such as Nike and Converse have offered customized shoes for years; now you can:
-design your own high-fashion high heels at SteveMadden.com
-build your own handbag at FreddyandMa.com
-choose from 5-standard dress fits to your measurements and your choice of fabric/color/print at dressbydesign.com
-Zafu.com will take your measurements and steer you to retailers selling jeans/casual or dress-pants/and bras that will fit you.
-design your own t-shirts at spreadshirt.com
-browse clothing based on your body-shape measurements with the help of myshape.com (with free shipping and free-returns!)

Color Forcasting, Fall 2008

The top 10 Pantone colors chosen by New York designers for fall 2008: There's change coming in the air for fall 08' fashion; the warm, subdued colors that typically make up a fall palette have given way to rich blues, greens, purples and innovative-tints of browns. "It's a big change for the season," agreed Leatrice Eiseman, executive director of Carlstadt, N.J.-based Pantone Color Institute, which supplied WWD with its top 10 colors for New York designers for fall. "The bottom five colors are the warmer colors [which] we're more accustomed to seeing for fall. The dominance of blue, purple and green [on the runways] really makes a statement about how influential they'll be for designers, and consumer-popularity, come fall."

Design Piracy Prohibition Act

The two sides of the fashion industry squared off in Congress on Thursday over the issue of whether fashion designs should be protected by copyright law. The pro-and-con cases were presented before a House committee by Narciso Rodriguez and the owner of a California apparel firm. The CFDA (Council of Fashion Designers of America) is trying to bridge the divide with the rest of the apparel industry and has held discussions with the American Apparel and Footwear Association for over a year, according to the designer and written testimony from Kevin Burke, the association's president and chief executive officer. The AAFA represents most of the industry's major brands and companies. Rodriguez, claimed knockoffs of his designs take away millions of dollars a year from his business." He laid out a case to the House Judiciary Subcommittee on Courts, the Internet and Intellectual Property on behalf of the CFDA in support of the Design Piracy Prohibition Act. The bill would amend current law to allow companies and designers to register their fashion designs for three years of copyright protection. Apparel, handbags, footwear, belts and eyeglass frames would be covered. The measure also would establish penalties for designers or companies knocking off designs. The fine would be $250,000, or $5 for each copied item, whichever was more. "The more acclaimed America's fashion designs become, the more they're copied," said Rodriguez in his testimony, citing a U.S. Chamber of Commerce estimate of $12 billion in lost revenues due to counterfeiting and piracy in the fashion and apparel industry in 2006. Rodriguez said he designs and puts together a 250-piece collection in one year over the course of six to 12 months for the fall and spring runway shows, which cost an average of $800,000 to stage. The fabric for samples costs another $800,000, pattern and design development costs $1.5 million, travel for design and fabric development reaches $350,000 and marketing rings up another $2.5 million. "There are so many aspects of a fashion business that make it risky in the best of circumstances and the pirates are only making it riskier," he said. (The designer, whose firm sold a 50 percent stake to Liz Claiborne Inc. last year, told lawmakers about his passion and inspiration for design, singling out the dress he designed for Carolyn Bessette when she wed John F. Kennedy Jr. in 1996. Rodriguez later sold 40 of those dresses. "The pirates sold 7 to 8 million copies," he said. "It was very personal. I've been pirated so much that my brand has been diffused.")
'Young designers will not survive in the face of knockoffs that dilute the value of the original design,' he told lawmakers, urging them to pass the bill, but the bill's opponents argue that inspiration will be stifled by such legal restrictions, leaving thousands of companies exposed to frivolous lawsuits that could drive them out of business.
Steve Maiman, co-owner of Stony Apparel Corp., a moderate women's and children's apparel manufacturer based in Los Angeles, carried the flag for those in the industry who oppose the bill. Maiman told lawmakers the fashion industry has thrived without "help or interference" from this type of copyright law. He argued that it is "impossible to determine the originality of a design because all designs are inspired by existing designs and trends."
"We're in this business to make cute garments at a fair price for the average American, not to sit in depositions in copyright lawsuits, arguing with lawyers over who invented an original style...of a kid's top for $14.99 retail before it goes on sale," Maiman said in his testimony.
(By Kristi Ellis, WWD.com)

Clothing Chain Popular With Teens [and Investors]

Started as a Macy's-men's brand in the early 1980s, apparel-retailer, Aeropostale brought in $1.58 billion during its fiscal year, which ended Feb. 3. [Aero's market-value is currently 18% that of Macy's.] The stock has more than doubled in price since its 2002 debut. Though retail stocks, in general, have lagged the market in recent months, Aeropostale isn't struggling. Thus, marking the fifth straight month Aeropostale has handily outpaced rivals American Eagle Outfitters and Abercrombie & Fitch.
So what is Aeropostale doing different?
Apart from targeting a narrower age group (just high-schoolers, not twenty-somethings), it's cheaper. It has also become more sophisticated in product selection and inventory management, say analysts. The narrower product assortment allows the company to spend more on marketing the inventory-likely 'winners.' It divides offerings into groups it calls core (jeans, polo shirts), fashion basics (dresses) and veneer (high-quality novelties), and seeks roughly a 35-55-10 split of the three, respectively. That's a shift to more fashion than the company has historically carried, which is boosting average receipts and margins and helping the company to capture a greater share of lower-income customers (a key strategy, which is proving successful, during tough-financial time for Americans.)
"Both fashion and quality continue to improve, narrowing the gap between Aeropostale and American Eagle's product lines," wrote Christine Chen, an analyst with Needham & Co., an investment bank, on Jan. 24. "Aeropostale's price points, however, remain 30% to 50% below those of American Eagle, which we think attracts the more price-sensitive customer in the more promotional and challenging retail environment this Spring season."

J.C. Penney launches Polo Ralph Lauren line

Department store aims to perk-up sales with a new brand launch.
The U.S. economy may be stumbling, but J.C. Penney Co. Chairman and CEO Myron "Mike" Ullman III believes its biggest brand launch ever - an exclusive line with Polo Ralph Lauren Corp. - couldn't happen at a better time. The brand, American Living, is expected to be a billion dollar business in the next few years, accounting for 5% of the department store chain's annual sales, Ullman said. It spans 40 categories, from women's and men's clothing to home furnishings, shoes and luggage. The merchandise, which started arriving in stores over the past few weeks, reflects the Ralph Lauren aesthetic - pink cotton polo shirts, floral bedspreads and madras shorts, for example. "American Living will lift the overall look and feel of the store," Ullman said. Women's blazers under the American Living brand retail for about $160, while dresses are priced at about $100. That's about 15 percent higher than the department store's top tier clothing brands like Liz & Co. and Jones Wear. "It helps diversity our business by reaching customers and new channels of distribution," said Roger Farah, president and chief operating officer of Polo Ralph Lauren (RL), in an address to investors Wednesday. As part of the alliance, Global Brand Concepts, a new division of Polo Ralph Lauren, owns the trademark for the brand and oversees the design, sourcing and production, while Penney's owns the actual product and is responsible for inventory and the selling of the merchandise. Ullman emphasized that the economic slowdown is a time to come out with exciting new merchandise. With the American Living brand, Penney's plans to add new categories like women's outerwear and infant clothing for fall and will unveil large and petite sizes for spring of 2009. The merchandise will be available online at jcp.com on Feb. 19. and in-stores Feb. 24. "When people find something they like, they respond to it," Ullman said. Even in tough times, "it's a reason to come to the stores."
(NEW YORK -(AP)CNNmoney.com)

Jordan Takes Steps to Improve Labor Conditions

Jordan's labor minister, seeking to reassure U.S. apparel buyers and the public that his government has taken steps to eradicate violations in the garment industry, outlined a five-year monitoring program Thursday intended to eliminate abusive factories; thus, paving the way for the launch of a voluntary apparel monitoring/inspection program in May. U.S. and Jordanian authorities cast an intense focus on apparel factories that manufacture for U.S. companies, including Gap Inc., Wal-Mart Stores Inc. and Jones Apparel Group Inc., after a May 2006 investigation by the National Labor Committee revealed working conditions that did not meet the country's labor standards. *The U.S. has been involved because goods made in Jordan can be shipped here duty free under a free trade agreement with the Middle East country and a second arrangement under a U.S.-Israeli trade pact. In Jorda, 98 apparel factories employ 54,000 workers. The program will receive $2.7 million in funding from the U.S., $1.05 million from the Jordanian government and about $500,000 to $600,000 in fees over five years from participating factories. Lejo Sibbel, an adviser to the labor minister, said the effort will initially have 25 to 30 participating factories, "partly because the brands for which they produce have indicated they will not source from them unless they join the program." (By Kristi Ellis, WWD.com)

Consumer-Studies: Less Risk Seen in Purchasing Clothes Online

Maybe Americans don’t need dressing rooms after all.....
For the first time since online retailing was born a decade ago, the sales of clothing have overtaken those of computer hardware and software, suggesting that consumers have reached a new level of comfort buying merchandise on the Web.
The surging popularity of clothing on the Web defies predictions that fashion — which is hard enough to buy in stores, with the aid of sales clerks and fitting rooms — would be difficult, if not impossible, to translate onto the Internet.The majority of shoppers, it was feared, would never abandon the habit of trying on clothes to assess the feel of fabrics and the fit of a given size, which varies a lot by brand; but that fear has ceased by proven results. At Zappos.com, a popular online retailer of shoes, jewelry and clothing, free overnight shipping and free returns, with postage paid by the company, now make it possible for customers to treat the Web site somewhat like a bricks-and-mortar store, where they can try on and discard a dozen pairs of high heels. “We think of ourselves as Netflix,” said Tony Hsieh, the company’s chief executive. “If you don’t like it, you send it back.”Apparel retailers are eager to refine their Web sites and win over new buyers.
There is a downside, though. Return rates for clothing bought online are about twice as high (14 percent) as other products bought on the Web, Shop.org said, giving retailers the cost of restocking and reselling merchandise. Online retail executives said liberal return policies and better navigation tools on their Web sites, like the ability to zoom in on and rotate the images of a $500 handbag, have bridged the once wide gap between online and offline clothes-shopping experiences.
Online apparel and footwear retailers are decking out their sites with a range of new features. (At Timberland.com, shoppers can design their own boots right down to the color of the retailer’s signature tree logo. They can consult a detailed chart that converts sizes for customers in Japan, Italy and Greece. And they can spin, rotate and zoom into images of it.“You can virtually pick up the product, giving you the essence of touch,” said Troy Brown, general manager of Timberland’s Web site. Sales at the site, started in 2001, have grown an average of 35 percent over the last three years.)
Over all, online sales grew 25 percent in 2006, to $220 billion, including travel. Shop.org, in surveying the state of the online retail industry, said the growth suggested that e-commerce “has come of age." The report, which surveyed 174 retailers, said the young industry was in little danger of reaching a saturation point and abruptly slowing down.
(By MICHAEL BARBARO, NYTimes)

Smart-Swapping (Shopping for Free)

It's like going to your friend's house to borrow clothes, except a lot more 'friends'-clothing to choose from, with a seamstress on-site to fit clothes to you (brilliant!,) and you get to keep the clothes, too!!
(You must bring a bag of your own clothes to add to the items to be able to participate.)
Where: SILVER SPRING, MD, 8415 Fenton Street (The First Baptist Church, Downtown Silver Spring, MD & DC area )
When: February 9th, at 10am-2pm
Contact: Tel: 240.247.0283 or 301.495.3336

[Swap-O-Rama-Rama is a clothing swap and series of do-it-yourself workshops in which a community explores creative reuse through the recycling of used clothing.]
*click on the title of this post to be linked-to the official website of swap-o-rama's (for more information.)

Nanette Lepore Urges, 'Let's Save the Garment District'

American fashion designer Nanette Lepore on Wednesday presented her fall collection 2008 along with an appeal to save the garment industry which is faced with "extinction" due to rising development.
Lepore is among the few remaining designers who can afford to have a workshop in Manhattan's garment district, located around 37th-39th Streets and 8th Avenue, where rising rents are forcing the industry to move to the Bronx, Queens, and even abroad to China and Peru.
In a flyer handed out to all who attended her show during Fashion Week -- buyers, reporters, boutique owners, celebrities -- the designer denounced rising costs which are gradually damaging the historical nature of the area.
"The collection you see on the runway today was designed, cut and sewn in New York City's Garment District. Yet here in the fashion capital of our country, the factories, trim and fabric shops, are on the verge of extinction," it said.
"These businesses are currently pushed out by the redevelopment of the neighborhood. We need your support to keep American fashion flourishing in the Garment District," it said urging readers to contact New York Mayor Michael Bloomberg.
"Without these resources, thousands of livelihoods will be at risk. Future generations of designers will no longer have a place to realize their dreams."

Apparel-Import Tariffs May Rise

A proposed rule change by the U.S. Customs & Border Protection agency could force apparel and footwear importers to pay millions of dollars, in additional duties, on products they make abroad and import into the U.S.
Apparel importer groups have formed a new coalition to oppose the switch. The rule at the center of the debate is known as the "First Sale Rule," which allows a company to determine the value of an imported finished product on the cost of the item at the point of the first sale in the supply chain — such as factory to wholesaler. The proposal would peg the final value to the point of importation, generally meaning the actual wholesale price.
Customs calculates duties based on the value of a product and companies using the existing rule essentially pay lower duties because the value of the product is lower in the beginning of the supply chain process. Apparel importers shipped $96.5 billion worth of apparel and textiles to the U.S. for the year ended Nov. 30.
Customs argued that most other WTO member countries determine the value of imported products based on the final price before importation.
This could increase apparel tariffs by as much as 15 percent. Possibly equating to hundreds of millions of dollars for the apparel-industry; therefore, companies would have to increase the price of their products.

80's-Famous Jeans, JORDACHE to be brought back by Heidi Klum

Heidi Klum has taken her partnership to model jeans for Jordache to a new level, she is now releasing a capsule collection with the denim brand. Called Heidi Klum by Jordache, collection themed Naughty and Nice is a 20-piece collection with an emphasis on premium denim, blouses, luxury knit tops, sundresses and embellished tops. The pieces were inspired by Klum’s own wardrobe, with an emphasis on comfort so it could be a collection that busy young mothers like herself could wear.
The idea for the collection was hatched when the team were photographing Heidi for the Fall 2008 advertising campaign. "On set we had a lot of downtime with Heidi to see what projects she was working on," Liz Berlinger, president of Jordache Enterprises said. "We started to say, 'Well, you know, Heidi, you're so verbal and aware of what you like and don't like in product, have you thought about doing a clothing line?' That was really the first time it came up."
In the design and production,"she was very sensitive to wanting the line to have a sexy edginess, but not be too revealing," Berlinger said. "She paid a lot of attention to details."
Jeans will retail from $140 to $170, while the other pieces will start at $80 to $250, with a launch set for April exclusively in Bloomingdale’s. Jordache is currently in talks with France, Italy, Germany, the UK and Australia for distribution rights.

Ten Things You Didn't Know About Fashion Week

If you're in Manhattan over the next week and can't get a cab, lunch reservation or hair appointment, here's why: New York's Fashion Week kicks off Friday, starting eight days of runway shows, exclusive parties and super-stylish people running around town.
Arguably the city's most glamorous event, Fashion Week involves 80 designer runway shows held in the 65,000-square-foot white tents in Bryant Park; other daily shows take place in venues throughout the city. The event is expected to attract over 100,000 people and generate around $235 million for the city.
Then there is the cost of putting on the shows. Many designers dole out as much as $500,000 and take six months to plan and prepare for their 10-minute presentations.

During each, models have as little as 15 seconds backstage to change outfits, handlers have to keep A-list editors happily seated in the front row and designers often start way behind schedule.
Still, there is a method to this madness.
The runway is the one opportunity a designer gets to show his clothing his way. Before the show, he puts the looks together, then sends models down the catwalk to music of his choosing. After the line is sold to the stores, says John Crocco, designer for Perry Ellis, designers have to rely on the retailers to show and sell in a way that appeals to a mass audience.
"At the shows, retailers see the designers' creative vision," says Fern Mallis, senior vice president of IMG Fashion, the firm that produces Mercedes-Benz Fashion Week. "They get ideas on how the collection should hang in the store, how it should be merchandised, what the window displays might be and if it should be featured in a catalog or an ad."
But producing a runway show is more than selling to stores. Magazine editors base their upcoming coverage on key looks coming down the catwalk.
What's Under Those Big White Tents? - How Much Does It Cost To Put On A Show? - Why Do Celebrities Get So Dolled-Up? - Who Gets A Front-Row Seat? - How Much Do Runway Models Make?
"When we started doing runway shows, it raised our company's profile dramatically," says designer Nanette Lepore. "After the first few seasons on the runway, sales jumped 20% a year."
To make it on the runway, a designer first has to make the cut.
"There are plenty of collections out there that do big business, but they're not runway-worthy--their looks are not fashion-forward and they are not directional," she says. "Buyers and the press have very little tolerance for seeing bland, mainstream collections on the runway." She adds, "Those that show are the talented leaders in the industry and their influence trickles down to everyone else."
The real judge and jury, she explains, are the reviews from press and buyers.
"If they don't get any press and don't sell well," she says, "they don't show up again next season."
New York primarily showcases American or New York-based designers, with a sprinkling of designers from Australia, England, Spain and Russia joining them.
"If you want to do business in New York," says Mallis, "you show in New York."
While Paris is known for focusing on couture and Milan is known for its high-concept fashion, Perry Ellis' Crocco says that the appeal of New York Fashion Week lies in its balance of fashion-forward and commercially appealing collections.
In recent years, the IMG empire has launched Fashion Weeks beyond just the world's fashion capitals, its events in Mumbai to Moscow allow local designers much-needed exposure.
New York Fashion Week is not open to the general public, but this year 40 American Express (nyse: AXP - news - people ) Platinum and Centurion card members will see the weekend shows first-hand from a lounge-style skybox viewing room.
The "By Invitation Only" package includes a behind-the-scenes tour of the tents, meet-and-greets with fashion industry insiders and a visit to on-site hair and make-up stylists. The packages, which sold out in December, cost members $700 or 87,500 membership rewards points.
The Past And Future Of Fashion Week
The first New York Fashion Week was organized in 1943 by fashion publicist Eleanor Lambert for buyers and fashion media unable to travel to Paris for the runway shows.
In the 1970s and '80s, designers began to show their collections across New York City in lofts, restaurants and clubs. In 1993, Fern Mallis searched for a venue where all of the shows could be centralized and in spring 1994, Fashion Week was held in the tents at Bryant Park.
The event will continue to be held at the park for two more years, but its location beyond that remains uncertain--and Mallis is not giving away any hints."Stay tuned," she says....
By Nicola Ruiz, Forbes.com

A Fashionable Strategy for Tough Times

Small boutiques and specialty retailers use up-and-coming designers and the latest trends to cut costs and attract customers

As New York City heads into Fashion Week, Khajak Keledjian, chief executive of Intermix, a privately held chain of boutiques, isn't worried about the current economic crunch. In fact, despite reports of consumers tightening their designer belts, he projects his clothing and accessory sales will climb to about $100 million for 2008. He also is adding four stores to the 20 he already operates in cities such as New York, Miami, and Los Angeles. Recently he expanded his flagship store on Madison Avenue and 77th Street in Manhattan by about 1,500 square feet.
At a time when well-known designers such as Tommy Hilfiger have delayed taking their companies public (BusinessWeek.com, 1/25/08) because of economic concerns and sales are down at retailers such as Saks (SKS), Coach (COH), and Nordstrom (JWN), Keledjian's confidence is even more noteworthy. Unlike these larger players, Intermix's operations remain both relatively small and highly localized. His stores are situated in hip neighborhoods, and his price tags aren't too outrageous: While it is possible to find a dress that costs $1,200 at an Intermix store, there also are plenty of $175 jeans and $58 T-shirts. And, unlike bigger stores, he doesn't sell big-name designers, preferring smaller, hipper labels—such as Yigal Azrouel, Imitation of Christ, Catherine Malandrino, and Theory—many of which got their first real exposure through Intermix.
"We're a fashion-forward company, and each season we try to please customers with new trends," says Keledjian, who founded the company in 1993. "They don't come in because they need new clothes; they just want to buy what they love."
Specifically selling trends may not be a novel concept, but it is one that seems to work well for retailers in the $196 billion U.S. apparel industry, according to Port Washington (N.Y.) NPD Group. Other mini-chains that have profited from this approach include Calypso, Scoop, and Fred Segal in Santa Monica, where celebrities such as the Olsen Twins and Lindsay Lohan are known to shop.
When credit was easy to come by, many established labels such as Salvatore Ferragamo and Hermès (HRMS) were able to expand their base to include consumers who may not previously have had the access or the money to buy their products. As luxury designers began building more stores and retail locations, sales exploded.
But the concern is that those shoppers who were giddily paying for a $6,000 Birkin bag using money from their home equity loan have now had to cut up their credit cards. If sales slip as much as many analysts predict, these retailers will need to pull in their horns and close up their less profitable stores. Hermès, to use just one example, has 24 stores in the U.S., many of which were added only in the past decade, and more than 40 in Japan. Smaller retailers such as Intermix won't feel the downturn quite so acutely because they aren't as exposed.
It's not just small boutique chains that advocate selling less well-known brands. Don't go to Henri Bendel looking for the latest from Chanel or Giorgio Armani. The whole point of the Fifth Avenue department store, which is owned by Limited Brands (LTD), is to skew younger, fresher, and, frankly, cheaper. The ability to connect with its clientele is the reason the store's vice-president and fashion director, Ann Watson, says Henri Bendel was highly productive during the 2007 holiday season, while other retailers were not. "We have established ourselves as a store that is constantly looking at the new and next in fashion and accessories, so our customer has come to view us as a reliable source in merchandise that reflects the current trend," she says.
So just what are the current fashion trends for 2008? At Henri Bendel, three major looks are hitting the sales floors for the next six months. First there's the look Watson calls "Boho Lux," which includes light-washed denim, tribal and safari prints, and blouses and dresses with tiered ruffles. Next is "Garden of Eden," and though that might normally conjure up images of a naked Adam and Eve, this trend includes oversize floral prints and soft, chiffon dresses instead of strategically placed leaves. Last is the "70s Revival," which will add a little tie-dye and fringe back into the wardrobe in rich, luxurious fabrics and colors. "And if there is one must-have item this season," Watson says, "it's a long day dress [to wear] with sandals, not heels."
Another fashion trend sure to attract consumers in need of a pick-me-up is the resurgence of color. "When you look at the collections like the collaboration of Richard Prince with Marc Jacobs for Louis Vuitton—those bags are in turquoise blues, golden yellows, vivid oranges, and red, so I think colors are going to be important," says celebrity stylist Robert Verdi, who works closely with Desperate Housewives star Eva Longoria.
It won't be one single wardrobe piece getting a color lift this season. According to Tom Julian, director of trends at advertising agency McCann Erickson, bright yellows, oranges, blues, and reds will be seen across the board in accessories, dresses, coats, and even in menswear. "Spring 2008 is going to have to jump in the stores in order to get people to buy. There are going to be more economic challenges, and people are going to say I don't necessarily need that right now. A shot of color is different and stands out enough."
Keledjian says Intermix is going for a "safari chic" look, selling army green handbags and khaki vests, as well as floral prints, tie dye, and lots of feminine frocks to fit the overall fashion mood of the moment. "There's lots of bright colors, lots of bohemian styles, and military men-inspired looks that we're selling now."
Of course, not everyone has to have the latest trend to look good in their clothing. Although Project Runway's Tim Gunn, chief creative officer of Liz Claiborne (LIZ), concedes there are some pieces that will be staples in every fashionista's wardrobe this year, such as flat shoes, he says he has "an issue with trends" because they are not made for everyone. "I really believe that women need to resonate to the things they look good in and stick by them. You need to wear what you're really comfortable in."
It sounds nice, but then shopping just wouldn't be as much fun.
BusinessWeek, by Susan Yara