Apparel in peril

Feb 01, 1999 10:30 PM  By

Casual apparel catalogers Lands’ End and L.L. Bean reported near-flat sales over the past year. Multititle clothing mailer Brylane suffered a 4.7% drop in its third-quarter sales. And response to the spring/summer and fall apparel at Eddie Bauer was so weak that the casual apparel cataloger/retailer, traditionally a strong performer for parent company Spiegel, had to increase its markdowns to get rid of slow-moving merchandise and manage inventory levels.

Some apparel catalogers are blaming an unseasonably mild fall for their lackluster 1998 sales (see cover story “Santa’s mixed bag”). Others would like to blame the ups and downs of the stock market and the uncertainty surrounding the impeachment of President Clinton. But most in the industry admit that the lack of new merchandise and the growth in cookie- cutter imitators are more likely reasons for a disappointing year.

“It’s very difficult to find unique apparel in catalogs,” says Steve Lightman, president of Arizona Mail Order, a multititle apparel cataloger recently purchased by Fingerhut Cos. “The apparel vendor base has deteriorated significantly with mergers and acquisitions.” To combat the vendor shortage, Arizona Mail Order manufactures 15% of its apparel. The company’s apparel sales in 1998 were higher than last year’s, says Lightman, meeting expections.

Gone are the days when a consumer could tell the difference between Lands’ End, L.L. Bean, and Eddie Bauer. “All the apparel catalogs look the same,” says freelance merchandiser Terry Cook. “The industry needs new designers, and they’re just not out there right now.”

Robin Glat, director of marketing services at AGA Marketing & Design, a New York-based catalog agency, agrees. “It seems that everyone is offering the same thing; they are not giving consumers any reason to open the catalogs.”

Compounding the lack of unique product is an increase in competition. Banana Republic and Macy’s are just two deep-pocketed retail brands that have launched catalogs in the last year. Then, too, “the ‘casualization’ of the work force has created additional challenges,” says Debbie Koopman, spokeswoman for Spiegel, which owns women’s apparel catalog Newport News as well as Eddie Bauer. “Consumers no longer need two wardrobes [for work and for leisure] and instead are putting their dollars into their homes.”

The one bit of good news is that, industrywise, apparel catalogs aren’t losing market share to stores. In 1997, catalogs accounted for $14.3 billion in apparel sales, or 9.2% of the $155 billion retail apparel market, according to market research firm NPD. As of the third quarter of 1998, catalogers’ share of the market was holding steady at 9.2%, accounting for $10.2 billion of the $111.2 billion retail clothing sales.

Still, to prevent losing individual market share, apparel catalogers are reevaluating their marketing and merchandising strategies. Some mailers, such as DM Management and J. Peterman, have added home-related products in their apparel books to boost sales. Others have launched home goods catalogs; Brylane, for instance, introduced its Gramercy Home book this past fall. And still others are spinning off “fashion-forward” apparel catalogs to appeal to the more style-conscious customer.

Sales growth of less than 3% in 1997, following a drop in revenue in ’96, spurred $1.07 billion L.L. Bean to launch Freeport Studio in early 1999. Touted as a fashion-conscious update of the Freeport, ME-based cataloger’s casual apparel line, the women’s apparel spin-off sells dresses, skirts, and jewelry not found in the company’s core book.

By creating a distinct book to sell more fashion-forward apparel, Bean should be able to avoid the mistake made by classic women’s apparel cataloger/retailer The Talbots. In 1997, hoping to attract younger buyers, the Hingham, MA-based marketer dropped some of its tailored offerings in favor of trendier clothing. But catalog sales plummeted 11%. Talbots has since reemphasized classic apparel; for the first three quarters of fiscal ’98, catalog sales were up 4% from the comparable period of ’97, despite circulation cuts, and total sales jumped 11%. Eddie Bauer is hoping to mimic Talbots’ turnaround. Prior to the holiday season, Redmond, WA-based Bauer reduced the number of styles it carried and returned to a “classic” apparel product assortment.

Lands’ End, too, is looking to jump-start its sales by improving its merchandising. Over the past five years, sales from Lands’ End’s core catalog, which accounts for more than half of the company’s $1.3 billion in revenue, increased a scant 2% annually. And at press time, the casual apparel cataloger’s earnings for fiscal 1999, ended Jan. 31, were expected to decline to $79 million, 20% less than last year.

As evidence of its renewed focus on merchandising, in October the Dodgeville, WI-based cataloger hired David Dyer, Lands’ End’s merchandising chief from 1991 to 1994, to replace president/CEO Mike Smith. Lands’ End wants “to bring new merchandising to the company and tighten up our existing assortment,” says spokeswoman Charlotte LaComb. While LaComb declines to list specifics, she says that consumers will see “a definite difference.”