APPAREL: trends analysis

Selling apparel will never be an easy job. “Just when you think you’ve figured out exactly what your customers want, everything changes – sometimes overnight,” says apparel expert Richard Romer, executive vice president for The CIT Group/Commercial Services, a New York-based credit protection and lending services provider for apparel manufacturers. “Basically, changes in apparel occur every other year: long skirts to short skirts, and back to long.”

The apparel market’s constant state of flux forces catalogers and other marketers to constantly reevaluate the market they’re targeting, and then reinvent their companies, their offerings, and their catalogs. For instance, are catalogs really the medium consumers turn to for high fashion? “The trendy, flash-in-the-pan stuff in apparel doesn’t have a home anymore in most catalogs,” says catalog merchandising consultant Andrea Lawson-Gray. “The easy-to-wear, easy-to-understand apparel – that’s what women are very comfortable buying from catalogs.”

A review of just the past decade reveals a dizzying array of apparel trends that have changed catalog creative, merchandising, and marketing.

Casual Fridays

One of the biggest apparel trends of the 1990s has been the steady shift toward casualwear in the office. The shift actually started some 10 or 15 years ago with “dress-down Fridays,” but in recent years, the casual movement has expanded to the entire workweek, particularly among smaller, entrepreneurial companies. More recently, larger corporations have followed suit, going so far as to memo employees that it’s okay to shed the suits, ties, and dresses every day.

Menswear, which according to The NPD Group has grown from $68 billion to $93 billion in all forms of retail (including catalogs) during the 1990-98 period, seems to have benefited the most from the casual trend. For instance, the Paul Fredrick Shirt Co. catalog, which had built up a name synonymous with men’s dress shirts, formally changed its name earlier this year to the broader Paul Fredrick Menstyle. And in a holiday 1999 edition of the catalog, the cover depicts a relaxed-looking man in a casual shirt (no tie) and sweater, rather than Fredrick’s typical white-shirt-and-tie-plus-suit look of the past. Furthermore, the first formal white dress shirt doesn’t appear until page 8, preceded by pages of turtlenecks, polos, sweaters, vests, and casual button-downs.

The shift also led other cataloger/retailers, such as Brooks Brothers and Jos. A. Bank Clothiers, to devote more catalog and retail space to khakis, chinos, and sport shirts. As one Brooks Brothers observer notes, prior to the mid-1990s, “a guy would get out of college, and keep buying and wearing the same stuff from Brooks Brothers his whole life. Now he’s not doing that anymore, and Brooks Brothers has been forced to change by offering more casual apparel.”

While some apparel catalogers had to scramble to adjust, overall the trend toward casualwear has had a “terrific effect,” says Romer of the CIT Group. “All of a sudden, all the men of the world discovered they didn’t have casual clothes. They had dress-up work clothes and weekend clothes, but they had to acquire this whole new wardrobe of casual office clothes. So it’s significantly increased the amount of men’s clothing sold.”

As for the women’s market, the casualwear trend has forced many catalogers to offer more loose-fitting clothes, as women seek greater comfort anywhere they go. “We’ve seen more effortless styles and fabrics with less structure, as women are more concerned with comfort and value than trendy styles,” says Skip Hartzell, executive vice president/chief creative and Internet officer for The Mark Group, which publishes the Mark, Fore& Strike and Boston Proper apparel catalogs, as well as the Charles Keath gifts book. “Only a few years ago, a lot of the clothing designers were doing things that were almost costumelike – stiff-fitting and very showy – and they bombed. People said they wanted clothes that were versatile, that could go straight from the office out to dinner with just slight modifications.”

Peter Canzone, president/CEO of $1.37 billion-plus Brylane, which produces the Chadwick’s of Boston, Lerner New York, and Jessica London apparel catalogs, among others, calls the new casual women’s wear trend the “Coldwater Creek look.” Women’s apparel book Coldwater Creek, he says, “represents a great example of the major change from a more structured look to a much more casual look. It has that easy-wearing, loose-fit kind of styling that has really been the epitome of the change in fashion over the past three to four years.” That’s probably one of the reasons Coldwater has been so successful, Canzone claims: “It came in at the right time with the right look.” Coldwater’s sales, in fact, have more than doubled over the past three years, from $143.0 million for its fiscal year ended March 1, 1997, to $325.2 million for its most recent fiscal year reported, ending Feb. 27, 1999.

Teen mania

The typical buyer of catalog apparel isn’t just the 29- to 34-year-old female anymore. During the past five years, there has been an explosion in the teen apparel market. Clothes targeted at teens have proved successful at retail through the likes of Abercrombie & Fitch, Tommy Hilfiger, and the teen departments of countless major department stores.

But in print catalogs, teen apparel has seen more limited success. A few catalogs have succeeded, while others are struggling. Still in the game:

– The trendy Delia’s catalog, which since its launch in 1993 has seen its sales soar to $158.4 million.

– The $10 million Alloy, which started as a teen community Website in 1996 before launching a print catalog in ’97. Response rates are “above the industry standard of 2%-3%,” cofounder/CEO Matt Diamond said recently. And he’s planning on a 500% sales lift this year, to $60 million, through extensive catalog mailings.

– Abercrombie & Fitch (A&F), which targets high-school and college kids with basic fashions in both retail and catalog venues, has seen sales and profits surge for at least the past three years since it went public. The company has enjoyed 29 consecutive quarters of profit increases while pulling more than 30% annual earnings growth. As chairman/CEO Mike Jeffries said in a recent earnings press conference, the brand “has never been stronger.” And having tackled the boys/men’s side of the business over the past few years, the company is now looking to improve the female side, which makes up 47% of its sales.

But beyond Delia’s, Alloy, and A&F, most teen apparel catalogers have struggled. The $2 million Air-Shop, for instance, was shut down last year. And teen accessories retailer Claire’s Stores discontinued its Just Nikki catalog last year, only a year after launching the book, due to sales shortfalls.

As Estelle DeMusey, Delia’s vice president of catalog and Internet, sees it, “Other catalogers aiming to get into the teen market look first at how they can use their own databases.” Then, she says, “they probably see better opportunities in other markets. We got in the market at the right time, and we were willing to look at different ways of creating databases.” Initially, she says, Delia’s “used a lot of [magazines] in developing our catalog database.”

“We thought about getting into teen apparel when Delia’s got hot,” says Brylane’s Canzone, “but that market is just so volatile, with too many dangers. It takes a very special mindset to do it, and you almost have to develop a whole new staff to understand that consumer.”

In terms of tracking this market, it’s important to recognize that the shoppers are getting younger and younger. “Buying decisions in teen apparel are being made at ever-increasingly younger ages,” DeMusey says. “If, for example, an 18-year-old made a decision to buy a tank top without Mom’s approval five years ago, that decision today is being made by kids younger than 16. It’s the influence of those particular parents who are comfortable allowing their kids to make their own buying decisions. Furthermore, teens are inundated with more information, so parents are giving them greater responsibility earlier.”

The new seniors

But while some catalogers continue to try to find the secret to success in the teen market, other mailers believe the pot of gold may be waiting for them at the other end: the growing senior market.

This year, people aged 50 or older make up 37% of all American adults; by 2010, 43% of adults will be 50-plus, according to U.S. Census Bureau statistics. “All stats show that the age 45-65 group will grow 35% over the next few years,” says Brylane’s Canzone. “The biggest question for apparel catalogers and retailers is, `Will these mature consumers want something different in apparel than their younger counterparts?'”

Perhaps because he is already attuned with the maturing customers who shop through his company’s Lane Bryant and Roaman’s women’s apparel catalogs, which target customers with an average age of 51, Canzone (answering his own question) doubts that the senior market will buy significantly different clothes than younger shoppers will. Of course, he still plans to make some adjustments. “We’ll have to merchandise a little differently to them, because the mature market replenishes its wardrobe less frequently than younger people do,” he says. For example, rather than constantly hitting older customers with hot new offers, “we’ll take an approach of `here’s something of a little better quality and durability; something you won’t have to change as often,'” he says. “My guess is that mature customers won’t buy as much apparel or as frequently as they did 20 years ago, so it’s going to be a challenge for us to stay on top of what they want. We’ll have to do a lot of market research.”

“Catalogers have to refocus every three or four years anyway,” says The CIT Group’s Romer. “Fortunately, the senior market doesn’t change as rapidly as others, such as the junior market, which changes every season.”

Lands’ End feels the key to meeting the senior segment’s needs is to “listen more carefully to what our customers ask for as they age,” says spokeswoman Michelle Casper. “They’ll probably be asking for some products we haven’t offered before. We’ll also focus on the needs of the generations behind the baby boomers, because we tend not to focus on one specific age group, but to look at the scope of customers.”

Gary Ostrager, vice president of direct marketing for Macy’s By Mail, says the department store cataloger is adapting by offering seniors more product along the lines of “a pair of slacks and a sweater-shirt, rather than the structured business suit a mature woman may have worn 10 years ago.” Fortunately, since Macy’s By Mail is only two years old, the catalog hasn’t had to make any drastic changes, he says. “But if you’re speaking of a Spiegel or a Bloomingdale’s By Mail, you can see that they have both evolved and are not the same books they were in the ’80s.” In the ’80s, Spiegel, in particular, focused more closely on women’s officewear. Now, like Bloomingdale’s By Mail, it’s offering more casualwear as its audience ages.

The growth in the senior market cannot be denied, and it’s given rise to new endeavors. Online catalog portal Prefer.com, for example, was founded in January specifically with the 45- to 65-year-old audience in mind, says CEO Doug Platt. When it launches this spring, Prefer.com will host more than two dozen existing catalogs, selling apparel and other products. “Boomers already control 70% of the country’s net worth and make more than 50% of consumer purchases,” Platt says. “And we’ve found that older people are a lot more likely to buy online than younger people, and they’re opting for the brands they already know and trust.”

A yen for zen

In terms of apparel styles, the latest trend influencing cataloging (particularly in women’s apparel) is the Asian look. Merchandise pictured in catalogs such as J.Jill, Neiman Marcus, and Anthropologie are reflecting a design trend incorporating simplicity and Zen-like qualities.

“The whole Asian trend was very dominant in home-related products first; we’re now seeing that cross over to apparel,” says Velyna Morales, senior vice president/general merchandise manager, apparel, accessories, and cosmetics for NM Direct, which produces the Neiman Marcus, Horchow, and Chef’s catalogs. She freely refers to the look as “feng shui,” a Chinese interior-design term that stands for tranquility and comfort.

Along these lines, in the beginning of this year, Neiman Marcus mailed its first feng shui-style book, called Tranquility. Neiman Marcus hopes to cash in on a style that’s already clicked for other marketers through the mail. “The whole casual trend has been here awhile,” Morales says. “Now people are focusing on investing their time and energy on improving the quality of life, which includes tranquility, harmony, and value-added approaches – all part of the Asian culture.”

Yet despite this and other hot fashion trends, catalogers should be cautious in their plans. “Fashion sellers have to be alert for more-conservative offerings today, because people don’t need new clothes as much as they used to,” says Kevin Silverman, senior vice president, Global Investment Bank, for Chicago-based ABN AMRO. “The bulk of people who have money aren’t as fashion-driven as they used to be. They make longer-term decisions. So apparel will always be risky for catalogers and retailers.”

As with many other types of catalog offerings, much of the appeal of apparel catalogs lies in the books’ ability to offer exclusive, unique merchandise. While some well-known clothing brand names do attract customers, apparel catalogers have succeeded in large part by offering clothes that you can’t get anywhere else. Besides, private label is better suited to cataloging – and more profitable.

“Private label is more adaptable to the needs of direct marketers,” says Gary Ostrager, vice president of direct marketing for Macy’s By Mail. “It’s very tough for the Liz Claibornes and Jones New Yorks of the world to adapt their product schedules and back-end operations to satisfy catalogers’ needs. And if you look at the key catalog players out there, you can see there’s very little brand-name apparel sold through catalogs anymore.”

Brylane president/CEO Peter Canzone calls private label the “backbone of our business. Branded apparel comes in waves. It goes through periods when it’s in, and when it’s not. But the biggest problem in selling name brands is price comparisons: If everyone has a Chaps knit skirt, it becomes very price competitive. But with private label, we can get better margins.”

Canzone does worry about private label’s consistency, however. “Private label is always chasing the lowest-price manufacturers to get the same retail price to increase gross profits,” he says. “On the other hand, brand name vendors are very particular in how goods are cut, sewn, etc.”

As for the Web’s viability as a fashion avenue, research analyst David Ricci, from the investment firm of William Blair & Co., thinks apparel catalogers are in a great position to make the Web work for them. “The economics of being online should be superior to [those of print] catalogs through a combination of less labor involved in order-taking and reduced marketing costs,” he says. “Websites also permit catalogers to experiment with more things and be more responsive to customers’ apparel needs.”

The key to selling more clothes online, according to Lands’ End’s spokeswoman Michelle Casper, is a fairly basic one. “We’re constantly looking for ways to make our site a more exciting and almost pleasurable shopping experience,” she says. “And as we evolve the site to be more user-friendly, we hope our customers will be more comfortable shopping online.”In particular, the teen market is ripe for ‘Net apparel sites. Streetwear – baggy and ripped jeans, high-end sneakers, and the like – is now beginning to take off on the Internet. “Teen-themed Websites like Bolt.com are attracting kids to spend a lot of money on clothes, because they become virtual hangouts,” says Richard Romer, executive vice president for The CIT Group/Commercial Services. “Selling apparel is only one of the things that these sites do. They also have e-mail and chat, and even play music.”

Technology is expected to greatly influence apparel in the coming years – and not just in terms of being able to purchase clothing online. Already we’re seeing what Young & Rubicam’s Brand Futures Group dubs “tech assimilation”: cargo pants with pockets for mobile phones, handbags with sections for Palm Pilots, and the like.

Then there are the textiles that are known in the industry as “technical fabrics,” such as microfibers and reflectives. Not only do such materials mirror society’s preoccupation with technology as a whole, but they’re also usually easy to care for and offer built-in stretch for comfort.

Technology, in the form of computer design and high-speed data transmission, also allows for the growth of customized apparel. Already, Levi’s is producing customized jeans created from measurements and specifications supplied by the consumer.

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