MAGIC vendors are trying to sound a positive note toward the spring season, with pent-up demand from consumers and lower inventory levels at retail expected to drive orders at the Las Vegas trade shows this week — even if the overall retail climate remains uneven, along with the questionable economy. top of mind for brands are pricing strategies, squeezed margins due to higher fabric and manufacturing costs and, of course, key spring trends — such as woven shirts and denim alternatives for guys.
“There’s been a lot of conversation about secondary fabrics such as twills and khakis,” said Michael Silver, president of Winnipeg, Canada-based Silver Jeans. “It’s been a while since guys were wearing anything but jeans, but even I’m wearing chinos these days and I’m a tried-and-true jeans guy.”
Related Articles
Silver noted a lot of denim brands are going into nondenim options to ride the trend, including Silver Jeans, but there’s a lot of competition in the market. “The danger is that there are a lot of companies that can make a great $29.99 khaki, so you have to make the washing and tweaks a lot better if you want to sell a premium version,” he explained.
You May Also Like
Despite the still-tough retail environment, Silver Jeans will achieve record sales this year of about $105 million, which Silver attributes to his price positioning, with jeans retailing mostly between $80 and $105 — a middle ground between value and premium jeans.
However, rising material costs in cotton and denim, along with rising labor and production costs in China, are a major source of concern for brands such as silver Jeans. “It’s very real. The price of fabrics, labor, transportation costs have all increased. There’s been a squeeze on our margins and they are a lot tighter than we’d like them to be,” said Silver. “The usual method is to run to a different country with lower production costs, but you can’t do that with a specialized product like premium denim. The laundry technicians and production people we use in China are skilled. You can’t to go India or Cambodia and find the same facilities.”
Smaller brands such as LASC, which manufactures in its home base of Los Angeles, still find advantages to produce domestically. “I can turn goods very quickly here if my customers have good sell-throughs and want to reorder. We can also produce smaller quantities here and have greater control and oversight of the production process,” said Don Zuidema, a co-founder of LASC, which sells swimwear, workoutwear and loungewear to about 100 wholesale accounts.
Zuidema, who also runs a retail operation under the LASC name in West Hollywood, said the retail climate is showing signs of improvement, but sales remain uneven. “The trend hasbeen really up and down. You can have some great days and weeks and then some times that aren’t so great. It’s not as consistent as it used to be.”
Under new chief executive officer David DeMattei, Lucky Brand is focused on revamping its stores, expanding its sportswear offerings and elevating product, with initiatives such as a new focus on its high-end Legend range. The company just launched a major advertising push in a wide swath of fall magazines and recently mailed a 24-page catalogue to 400,000 of its customers.
“We’re making a lot of changes and we are very encouraged by business,” said DeMattei, noting that the company has so far remodeled 50 stores. “The biggest issue is mall traffic, which has been down significantly, so we need to draw that traffic in and convert shoppers [into buyers].”
Premium product has to be a key selling point for Lucky Brand, added DeMattei. “We only have 180 stores, so we don’t want to be a commodity business, which I think the brand had gotten a little lost in. We need to offer true premium product,” he said.
Lucky was able to make changes to the product in its own stores and is now aiming to make similar changes to the product at its wholesale partners. “We’ve met with Macy’s, Dillard’s, Nordstrom and Belk, and we are working to reposition the brand,” noted DeMattei.
In women’s, many West Coast-based resources expect to see brisk traffic at the show, judging from how few buyers turned out for this month’s Los Angeles market week.
“The August Los Angeles market we felt was under-attended because so many people are planning to go to MAGIC,” said Linda Shaich, director of sales for Johnny Was, the 25-year-old special occasion brand from Los Angeles, which is showing six lines at WWDMAGIC. Still, apart from some big accounts such as Zappos, Shaich said it’s harder to nail down appointments. “I find a lot of buyers get overwhelmed by the number of shows, so getting people to commit to appointments is a thing of the past,” she said.
Jason Yi, national sales manager for Los Angeles-based women’s denim company Miss Me, expects aggressive buying from retailers. “We see our markets getting slightly smaller but our trade show numbers getting bigger,” he noted. “The economy is slowly picking up and everyone wants to get their buying done at once and not worry about it. MAGIC is a one-stop shop.”
Yi said the company’s biggest concern was to keep prices the same while upgrading quality. Ninety percent of Miss Me’s jeans retail for $98. The company aims to offer cuts for everyone, from skinny to flare, and has gravitated from destruction-style washes to toned-up and cleaner looks.
Dina Bar-El, a resource known for its red-carpet gowns, is showing at WWDMAGIC for the first time in White Gallery, a venue dedicated to special occasion dressing.
“Our area of bridge has not been as affected because those customers aren’t as price conscious, but even we are reducing prices and working on a tighter margin to bring in new stores that normally would not be able to afford us,” said vice president Allen Abrams. Dina Bar-El dresses range from $268 to $380 at wholesale.
Sledge USA, a five-year-old women’s casual tops resource based in Los Angeles, hasn’t increased prices since it launched. “We are giving customers more for less,” said Monique Abergel, head of design and product development. “Studs, sequins and crystals are costly, but we work to keep prices reasonable — between $39 and $59 retail,” she said. The company works with boutiques to turn reorders quickly because the product, known for its washes and burnout Modals, is made locally. “We just do what we do and try not to listen to the negativity. People still have to eat and dress.”