This has got to hurt. According to The NPD Group, women between the ages of 18 and 34 spent
$31.31 billion on apparel between August 2007 and July 2008. That is almost a 6% decrease over the same period last year.
As a result,
contemporary brands are taking several steps to at least maintain their
sales levels. The moves include offering a range in price points, cutting and fine-tuning the number of
styles on their lines and focusing on customer service.
say generally department stores are planning their business down,” said
Andrew Oshrin, president and chief executive officer of Milly, the
eight-year-old contemporary brand started by Oshrin and his wife,
designer Michelle Smith. “Neiman Marcus is our biggest customer and I
would say they are being conservative, and that is probably a good
While it may be good for retailers to closely watch
their spending on spring merchandise, designers are starting to get
nervous. Oshrin said his business is still OK overall, but he will
close 2008 with sales down by 5%, when he had planned to
increase them by 15-20% percent this year.
be like a lost year, but we will really only know the extent when we
see what pans out over the next few months,” he said. “Given the
general economic outlook, we made a concerted effort to maintain our
prices comparable to spring ’08 despite the weak purchasing power of
the U.S. dollar. When pricing, we looked very carefully at every single
piece to ensure that the value is strong.”
More bad news. Josh Sparks, chief executive officer
at Rockwood Management Group, a New York-based firm specializing in
consulting for the contemporary apparel market, predicts a great deal
of fallout in the coming months.
“It’s just evidence that the
old business model doesn’t work anymore,” Sparks said. “Emerging
designers who only do a couple million dollars in business every year
will not be able to sustain their businesses in this economy.”
Nanette Lepore told WWD she is heavily focused on the end consumer —
working to make sure she is purchasing even in these tough times. The
company just launched an ad campaign for the first time and will also
be providing new selling tools, such as look books at the retail level.
“We’ve been taking a lower markup on our tops so we can bring
the prices down and have a full, well-rounded collection,” she said. “I
want people to be able to come in and buy an entire outfit for under
$1,000. That’s the goal.”
Read more "Contemporary Firms Buckle Up for a Rough Ride" here
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