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)