Cheryl Nowaks Big Apple Diary

HI All,

It has been quite a frantic last 10 days for retailing in the US. Whether you are a U.S. retailer, clothing manufacturer or designer the only way to grow sales volume is through diversification….

– Jones Apparel Group confirmed that they bought Barneys for $400 million. To bring you up to speed the Jones Apparel group is a branded manufacturer of ladies apparel so the purchase of a luxury retailer is certainly a marriage outside the norm. Their core business was in better labels ; Jones & Jones Sport, Signature .In the past few years they also ventured into the moderate market with labels such as Gloria Vanderbilt and Bandolino. Expansion into moderate pricepoints was a smart decision as it offers growth potential beyond the stagnant better business segment .

Will watch this progress very closely as Barneys has really lucked out since Jones Apparel has deep pockets and plans to expand the specialty stores fleet of flagships and smaller Co-op concept stores under the continued leadership of its CEO Howard Socol.
The US  social structure is such a dichotomy …sadly the poor are getting poorer but current US sales patterns have also shown that   the growth of luxury retailers ( ie; Neiman Marcus & Saks) continues to be an opportunity. Barneys offers fantastic growth potential. With current annual sales of $444.2 million the plans are to build this into a $1 billion business. …faithful Barneys’ customers look forward to their success!!

– Hottest news off the press is that Kmart has snatched up Sears for $11 million. This merger combines two of the most famous names in U.S. retailing who have both been struggling over the past few years. Of course the stock market is wondering if this is about retail or real estate …only time will tell.

The combined company is expected to have $55 billion in annual revenues; 2,350 full line and off mall stores and 1,100 specialty retail stores. Annual volume will trail only Wal-Mart and Target. This new company Sears Holdings will now have the branded labels to compete head to head with the likes of Wal-Mart. Both bring powerful brands to the merger: Kmart has been highly successful with the “Martha Stewart Living” brand in home textiles, bedding , decorative home etc. Meanwhile Sears acquired “Lands End ” catalog 2 years ago & has rolled out Ladies, Mens & Childrens apparel shops in selected Sears branches.This move saved the Sears apparel business. With the merger comes greatly expanded exposure for these key brands and a new customer base.

– Lastly let’s talk about fast fashion diversification ….on Friday 11/12 H&M launched its Karl Lagerfeld collection in about half of its 1,000 stores in U.S. and Europe. Of course those savvy New Yorkers are always on the cutting edge of fashion especially if it’s a bargain!!  Customers started queuing up outside the H&M NYC store locations at 7:00 am in anticipation of the 9:00 am store opening. Shipments were supposed to last several weeks but most of the merchandise sold out by late Friday. The hottest items for NY stores were the Lagerfeld screen printed silhouette tee shirt at $19.99, the sequins jacket at $129 and  the lace dress at $99.90. 
Karl might have disappointed a lot of customers but they will be eagerly awaiting the arrival of the next season!

So it has been a very busy time for retailers & manufacturers alike with lots of suprises ….who knows what will happen next?
I must make note of the fact that Thursday 11/25 is the Thanksgiving holiday in the U.S. Traditionally the Friday after Thanksgiving is the busiest shopping day of the year. The “biggies” in retailing are feeling upbeat and positive about meeting Holiday sales projections.
I will be closely following ( & shopping) to bring you up to date info on the NY retail scene during the Holiday season.

Till next week,
Cheryl

 

Hi Everyone,

As Thanksgiving holiday & the Macys’ parade approaches..which is the official kickoff of the Holiday ‘ 04 season..everyone is holding their breath in anticipation. There is cause for slight optimism as October retail results for same store sales (comps) were better than expected after a disappointing July, August & September performance. In all fairness lackluster sales in September were impacted by the consumers inability to get out & spend as hurricanes hit the East coast of the US. Thankfully temperatures across the US have turned cooler which has a positive impact on customer traffic & put them into a “holiday spending headset”.

US Specialty retailers turned in some of the most impressive same stores sales results for October with an average of + 6.1% comp most noteworthy performances came from ;
– American Eagle Outfitters Inc at + 31.7% comp (Teen/Junior customer)
– Bebe Stores Inc at +30.6% comp (Contemporary fit customer)
– Abercrombie & Fitch at 11.0% comp (Teen / Junior customer)
– Chico‘s FAS the darling of the Baby Boomer crowd looks to be back on track with a +9.3% comp

Under the Department store group which had an average of + 2.7% comp for October looks like Luxury retailers can have a positive outlook as consumers still search out unique & “one of a kind” product;
– The Neiman Marcus group at + 13.6 % comp
– Saks Inc at +4.4 % comp
 
Also above average in Department stores were:
– Kohls at + 6.0% comp
– Federated at +4.0% comp

OK so these are encouraging results but are they a reliable trend for the Holiday ’04 season. Only time will tell as all NY Retail stores have peaked their merchandise stock selections and are ready for holiday customer traffic.

Here’s what you need to know about the NY fashion customer….she is savvy but fickle…this is a customer who regularly shops at luxury department stores like Saks ( to identify the “must have ” designer trends of the season), Macys ( with savings coupon in hand maybe they have been interpreted by the moderate to better Brand labels & are on sale! ) and Target ( A trendy place to shop & pick up an item from designer Isaac Mizrahi to complement the outfit) 

So what will be the fashion winners of the season…as retailers are fully aware of the sheer fickleness of the fashion customer  they realize everyone is their competition so fashion trends cross pollinate Specialty, Department & Mass merchant stocks in all RTW categories.

Here are my picks of the hottest trends ..the “got to haves” of the season….

– the “Chanel like” tweed boucle jacket newest interpretation for holiday with velvet ribbons, raw edged sheer fabrics and metallic accents. Love the addition of brooches as a pin or buttons – this was a winner from Spring that continues its momentum through Holiday. This item can be found at all pricepoints from designer down to moderate. It is an item that transcends all customer types.

This jacket has become a classic but as a volume item could have a short life expectancy. The future looks dicey and it is doubtful that it can continue as a volume best seller through Spring’ 05. But we will see!

– Fake fur mania- real fur is back but the synthetics are where it’s at in leopard, mink, beaver, raccoon and faux shearling – Influences in RTW categories; chubby bomber jackets & vests, fur trim collar & cuffs on sweaters. Big business potential in accessories with strength in handbags, separate fur collars, ponchos/capes & shoes:boots & clogs. Of course the “must have” Ugg shearling boot from last Fall continues ..if you cannot afford the original in real shearling then buy a copy there are so many available…remember it is the look that counts!

– The ladylike blouse – a definite oldie but goodie as a category that died in the 80″s after the Dynasty girls Krystal & Alexis were no longer prime time makes a triumphant return.No longer are there oversized shoulders but soft tailoring influences from the 40’s & 50’s.

Key fabric is silk or poly silk charmeuse& satin in solids & prints. Princess seams give a fitted illusion & peter pan collars look fresh.Bodies range from long sleeve shirts to bare silhouettes tanks, babydolls & halters for the Contemporary customer. Lingerie inspired looks are the key. Of course there is lots of beading, brooch like embellishments & metallic colors for a true holiday statement.
This is a trend to watch for Spring as it offers volume for all customer types.

– The skirt category – continues in importance from the Spring season. Short tiered bodies for the comtemporary fit customer, assymetrical hemlines are still alive looking new in panne velvet, A -line bodies in solid silk charmeuse, pencil silhouettes continue in tweeds, leather & all over beading. The pleated skirt still clings to life in a variety of plaids but looks newest in flowy fabrics like silk charmeuse, chiffon & lame.

– Denim jeans are a staple of all customer types. Even the less trendy update customer understands they are multi purpose. Just put them on with a “Chanel like boucle jacket” or a dressy blouse or a fur trimmed sweater & a pair of heels and off you go to a Holiday party.

– Tweeds in jackets, skirt & pants- definitely not worn as head to toe suited looks. Mix a tweed jacket with a flowy silk skirt or pair up tweed pant or pencil skirt with a ladylike blouse & a cardigan sweater.

– The poncho continues to drive sales in specialty & department stores. Newest holiday versions are in metallic fabrics, embellished with beads & fringe, fur trimmed & in bright colored suedes. Momentum continues to build in this category and all retailers are searching for new silhouettes to keep it alive through spring….perhaps the dolman or batwing will make a triumphant return???

– Cardigan silhouettes –  this is not your Grandfather’s cardigan. Newest bodies are fitted not sloppy…often belted or wrapped.
The contemporary / trend customer likes them short as a shrug. Luxury yarns in Angora, cashmere and mohair blends dominate. 

– I want to draw attention to the importance of Accessory categories for Holiday. They can update an old outfit & they are great gifts.
Think bold, multi colored beads,& jewels…brooches are a key item, necklaces & bracelets in chunky beads or adorned with multiple charms, belts with  heavy silver & jewels. Fur ( real & fake) mufflers, scarfs, gloves .

– Of course the holiday season would not be complete without all the glitz…but somehow this year it looks fresh & saleable. 
Colors that look most exciting are the pinks ranging from pastels to raspberry to fushia, purple in regal jewel tones to pastels, blue in royal & turquoise, greens in forest, herb, apple & lime continues to look fresh & trendy. Metallics are always important at Holiday but bronze & gold colors in silk charmeuse & chiffon look fabulous.Chocolate brown looks great when paired with any of these accents.
Of course all your last year black pieces will enjoy a face lift when paired up with this seasons newest colors!

The Big Apple is ready for Holiday traffic so let’s hope the consumer is in a spending mood.

That’s all for now…until next time,
Cheryl Nowak