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May 1, 2010
by Kevin Zimmerman
Mark Twain said, "The finest clothing made is a person's skin, but of course society demands something more than this." While clothes are de rigueur for polite society, apparel as a consumer category isn't always resistant to economic downturns. Happily, positive signs are being seen in the apparel industry. Most retail sectors posted positive sales growth figures in January and February, according to the MasterCard Advisors' SpendingPulse report, which tracks aggregate sales activity in the MasterCard payments network, together with survey estimates for sales paid for in cash and checks. Sales of men's apparel increased by 5.7 percent in February, also, apparel sales were at stronger prices than a year ago, according to the report, an indication that retailers didn't have to resort to significant discounts to drive sales. "A year ago, spending was really in critical condition," said Michael McNamara, vice president for research and analysis at MasterCard Advisors. "Now, it's in serious but stable condition."
A renewed sense of optimism was also apparent at the American Apparel & Footwear Association's 2010 Executive Summit, held March 10-12 in Washington, D.C. "The consumer today is basing purchasing decisions on what they need, not just what they desire," said speaker Marshal Cohen, chief industry analyst at research firm the NPD Group. "Consumers today are not running into stores; they're running away." Cohen also called for a renewed focus, not just on teenage apparel consumers, but on their parents as well. "Thirteen to 17 year olds represent 13 percent of the apparel market," he said. "But only seven percent of teenagers are buying it. Mom is very much a part of the equation when it comes to selling to teens. How many of you market to Mom?" He went on to recommend that companies refocus on when consumers are shopping most (Friday through Sunday). "We've been doing the same thing for 500 years," Cohen said. "We've gotten caught up. It's time to innovate."
Still, the buying power of teens is not to be discounted in the apparel market. "Whether it be sports equipment, athletic footwear, fashion or electronics, the teen market is showing signs of life and positive growth," Cohen told the Los Angeles Times, adding that teens today are now spending about six to eight percent more in general than they were a year ago. "You've seen teens come back pretty aggressively in terms of spending," retail analyst, Christine Chen, of investment bank and asset management firm Needham & Co., told the Times. "Teenagers are not a savings-oriented bunch. They spend every dollar they get."
The apparel category is hardly out of the woods yet, of course. "We believe apparel sales will be flat in 2010," declared consultancy firm Gerson Lehrman Group, in a statement. "Despite the slight uptick in retail sales in February, the country still faces high unemployment; commodity prices will likely increase in 2010, which will slow the hiring process to preserve margins, and consumers now value saving more than spending. Indeed, continued uncertainty over the economic recovery, and a still worrisome national unemployment rate of 9.7 percent, means merchants across all categories must proceed with caution if they are to succeed."
"We've been doing okay," says Gabe Mann, president of Big Lucky Deals (www.bigluckydeals.com). "Business was down for most of last year, but we saw some good things happening around the holidays, and we're making some very good projections for this year." Although Big Lucky Deals' inventory also includes toys, books, cell phones and hardware, Mann says that apparel remains one of its strongest categories. Printed t-shirts are especially popular at the moment. They range from state and city-specific designs to holiday-related shirts, retro designs, and Three Stooges licensed tops. Most sell for $2.25 per unit ($162 for a case of 72 shirts), though some, including a line of New York City logo and skull/goth t-shirts, go for $1.64 per unit ($118.08 per case).
The firm also does well with lingerie items, Mann says. This line ranges from sports bras ($6 per unit, $144 per case of 24) and boy shorts ($1.40 per unit, $201.60 per case of 144) to an array of bra and panty sets, most priced at $3.49 per unit, or $251.28 per 72-piece case. In addition, Big Lucky Deals offers cargo pants, shorts, sweatshirts and hooded sweatshirts, as well as a full range of coats and accessories. The company also currently offers 75 percent off shipping charges, and does not have any minimum order requirements. "We think 2010 is going to be a very big year for us," Mann promises, "And we're constantly updating our website to show that."
Also continuously updating both its website and inventory at its four brick and mortar locales is MOA Collection (www.moaus.com), according to its president, Rok Chang. "We have been very fortunate," Chang says. "Business has been going well for us." MOA specializes in supplying boutique stores, mall shops and department stores with the latest in junior and women's apparel. Their shorts range in price from $30 to $48, while skirts go for $60, and a variety of dresses and sets, available in a number of designs and colors, go for $66 to $78. Tops range from $48 to $72, with most priced at $60. The company also occasionally features clearance items, and when available, a "New Items" tab on its website. Most, if not all, of the inventory on MOA's website is also available in its four Los Angeles area locations.
"Business was slow in the winter, but we've been seeing positive movement in February and March," at Topstar USA (www.topstarusa.com), according to president and owner, Talib Hussain. The wholesale distributor of apparel and accessories, based on Long Island, does particularly well with t-shirts, Hussain says. As a result, the slow winter of 2009-10 wasn't all that atypical. Topstar's best sellers in the category include a box of 36 t-shirts in various solid colors for $69; a box of 72 white "tall tees" for $126, and a box of ten color t-shirts for $21. The company also regularly offers sale items.
In addition, children's white t-shirts are currently priced at $10 per dozen (regularly $12 per dozen), and thermal heavyweight tops, normally priced at $48 per dozen, are now on sale for $45 per dozen. Topstar also offers a line of women's jeans: regularly priced at $144 per dozen, all are currently on sale for $95.88 per dozen. Although apparel has been Topstar's mainstay, Hussain says that the company has also expanded its inventory to include socks, and more recently, towels. "Basically we offer top quality cotton products," he says.
Cotton is also king at Roochi Traders Inc. (www.roochi.com), which is in the midst of rebranding itself as Cotton Heritage, according to executive vice president and chief operating officer, Bruce Berton. "We're undertaking a complete image change for the company," he says. "After 28 years as Roochi, we're redoing our catalog, our website and our advertising efforts, and increasing our attendance at trade shows." While the first half of 2009 was, "Not good," Berton says, "The second half was excellent. We made both our sales and profit targets, and for the first quarter of 2010 we'll make our sales target, and show a three and a half to four percent growth."
On the ladies' side, top sellers include rib tank and spaghetti tank tops ($2.25 to $3.50 each) and U-neck ($3.75 each) and V-neck ($4.75 each) t-shirts, while mens' top sellers include tank tops and muscle tees (both $2.25 each), as well as crewneck tees ($2 each regular, $3 each big and tall sizes). Roochi also saw a larger than usual spike in fleece jacket sales over the winter months, "Almost two times the sales that we normally do," Berton says. "The cold weather season usually ends for us at the end of December, but this year it lasted into the new year." The company's line of fleece products ranges from a basic pullover hooded fleece ($8.50) to a full-zip polar fleece with Sherpa lining ($20). In addition, Roochi offers a line of youth, infant and toddler wear.
Berton credits much of the company's newfound success to its re-imaging efforts. "Our website is literally brand new. It went up on March 1st," he says. "We're trying to give it more functionality, instead of just having the same old, basic features that everyone else has." At the last four trade shows that Roochi/Cotton Heritage staff attended, "We had over 20,000 people come to our booths," he adds. "Even some of our regular customers didn't know who we were at first." The key, Berton explains, is to, "Think outside the box. We decided the time had come to take a gamble, and it paid off."
Hard work is paying off at Wholesale Apparel Direct (www.wholesaleappareldirect.com), where, "Business has been crazy," says president, Yavar Assil. "We're always busy!" The company, which proclaims itself, "The world's leading online wholesale clothing distributor," offers women's clothes from over 50,000 apparel wholesalers. Currently selling well are women's summer hoodies (package of six for $25.50); jeans in a number of styles and cuts (packages of 12 for $78 to $81); and a range of evening, formal and cocktail dresses.
Apparel Direct also offers a line of plus size tops, usually offered in packages of three, for $17.25 to $24.75, as well as a large selection of accessories, jewelry, and bags and purses. The company also maintains a free shipping policy on orders of over $195.
The following were interviewed for this article:
Gabe Mann, President
Big Lucky Deals
219 36th St.
Brooklyn, NY 11232
Toll Free: 877-713-3257
Rok Chang, President
1458 S. San Pedro St., #L49
Los Angeles, CA 90015
Talib Hussain, President/Owner
158 Center Lane
Levittown, NY 11756
Bruce Berton, Executive VP/Chief Operating Officer
Roochi Traders, Inc.
6393 E. Washington Blvd.
Commerce, CA 90040
Toll Free: 888-766-2448
Yavar Assil, President
Wholesale Apparel Direct
Toll Free: 877-878-5557
Topic: Company Profiles
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