State of the Industry Address

[endorphinz]

in order to counter this volatility, the fashion industry has long ago shifted from a sell-in focus to a sell-through focus. retailers now expect brands to share risk with them, especially those retailers which are strong brands in their own right. usually through tough discount requirements, but sometimes it goes so far as to the point of brands having to accept returns of unsold stock from their retail accounts.

you have no idea how accurate this is. It's the reason I got disgusted & left the industry.

I started in menswear manufacturing business in 1977 Retail business, ALL retail business,especially menswear, started a steady decline soon after. Discounting first knocked out the specialty retailer and later hit department stores.

When I started there were about 10 dept store corporations..CORPORATIONS..... not chains...... each corp owned several chains. Slowly but surely these corps began to merge and closed whole chains & individual stores. Today I believe there are 3 dept store corps left . I stopped following.

Retail buying offices & consultants also began to go out of business


The remaining corps are ridiculously powerful. They have all the leverage meaning it's pretty much impossible not to acquiesce to their demands which include but aren't limited to guaranteed sell throughs,advertising $$$,markdown $$$ and unrealistic delivery schedules.

E Commerce has & will continue to further change the retail landscape. There's no question in my mind that more and more manufacturers will begin to court retail consumers directly.

http://en.m.wikipedia.org/wiki/List_of_defunct_department_stores_of_the_United_States

you can follow the links within this article for more info on just how pervasive & devastating the mergers & closings were.


Disclaimer: My knowledge & experience is limited to the USA

*EDIT*

case in point

[Faust]

/\ truth.

[twmllr]

http://www.businessoffashion.com/201...e-atelier.html

Thank You very much for this interview Faust

[zamb]

Only the strong survive, and sometimes the strong is ugly and not so aesthetically polished............

[zamb]

there is a lot of interesting aspects of this article to touch on, and I guess over time we wil and people can give different views

one of the things that struck me most is this:
“The price discrepancy between the United States and Europe has always been bad,” said Steele. For a long time, the brands that we carried worked for us despite the price differences between America and Europe,"

I have had stores in Europe who clearly said they like what we do but would never buy it because as a matter of principle they do not import brands not based in Europe. This is something important consider. because with a few exceptions, I think Menswear brands that don't do "Americana" and "Preppy" for the most part are not well supported in America. but from my experience in dealing with clients directly, there is enough of a client base for a healthy establishment of American based brands like ours sold in American stores, where the whole subject of customs and exchange rates are not a part of the consideration.......

more in the morning, its 4am

[SuE]

http://www.businessoffashion.com/201...e-atelier.html

Thank You very much for this interview Faust

Thanks so much Faust

[DRRRK]

Thanks for the interview. The reason for the end of Atelier was mentioned before and when you think about it, considering the seasonal sale threads here and the growing number of affiliates, it doesn't come as a surprise that they struggled for some time. I am at a point where I have to admit, that I can hardly but don't want to afford clothes by ,for example BBS, at full retail. 700-900 EUR for a variation of some pants with the uncertainty of how they fit from one season to another are just more than I want to spend. Instead, although I don't crave for the latest codes, I do what I'm not proud of, I'm waiting for the sales and buy second hand stuff here while I rarely enter a store in person. Obviously I'm not alone and it's not the stores who decided to make stuff more expensive. In the end it's up to the brands themselves and where they see their customerbase.

[Faust]

Just for the record at no point in our conversation did Karlo put the blame on the customer. Everyone acts out of their own self-interest and it's understandable that if a leather jacket has a $1,000 difference, it makes a difference. What is cringe-worthy is that plenty of people will go out of their way to say a buck or two. Shit, forget about $350 t-shirts - I can't sell enough $40 magazines to a supposedly supportive community of 15,000 members whom SZ gave so much information (including money-saving shopping opportunities), so whom are we kidding?

[bonejelly]

Great article Faust. Kind of surprised how open and in-depth Karlo got about situation. No light and fluffy journalism here. Great to get some real insight after all the here-say of the last couple weeks.

[zamb]

Thanks for the interview. The reason for the end of Atelier was mentioned before and when you think about it, considering the seasonal sale threads here and the growing number of affiliates, it doesn't come as a surprise that they struggled for some time. I am at a point where I have to admit, that I can hardly but don't want to afford clothes by ,for example BBS, at full retail. 700-900 EUR for a variation of some pants with the uncertainty of how they fit from one season to another are just more than I want to spend. Instead, although I don't crave for the latest codes, I do what I'm not proud of, I'm waiting for the sales and buy second hand stuff here while I rarely enter a store in person. Obviously I'm not alone and it's not the stores who decided to make stuff more expensive. In the end it's up to the brands themselves and where they see their
customerbase.

What evidence do you have of this?
All three parties are guilty in the whole scheme of things albeit unintentionally so.
As I have said before and will say again, there is no question that the price of designer clothing is too high, but if you think designers are making a killing you are fooling yourself.
Many designers in this business supported by an SZ type clientele, are operating at a loss or barely making a profit. I can tell you that I know of two of the more creative designers among us who have gone out of business in the last six months, another who has been on the brink of bankruptcy and fighting for dear life. One designer told me that after taking orders for the SS14 season, his production company has increased the prices so high that it's gonna be impossible for him to make a profit after he produces the orders and ship to the stores. I check the website of a lot of stores very often, and the sales to me are incredibly slow before the sales seasons begin. No one wants to spend more for an item than they need to, but when you wait until things are on sale before you buy, you are indeed not helping the situation of higher prices but contributing to it. There is a sick cycle going on, and it really is gonna reach a weeding out/ breaking point somewhere along the line.

I must also tell you, some of you consumers dont want well priced, well made goods. it seems to me, there is some psychological factor at play, where people are more interested in buying the higher prices item and trying to get it on sale rather than getting a very good item that is decently priced even if the moderately priced item is as good or even better than the bigger ticket item. We offer some of the best made pants in this niche at a favorable price point, yet I get customers all the time who instead of respecting what we do are haggling about price and wanting the items at the cheapest possibly price they can get, even if it means $10 less............
In the end, we all must play our part in fixing these issues and its not going to be easy, if at all. Whether we want to or not SZ and its members play a huge role in this because there is no other place around where there is such a highly curated body of information and where you have Store owners, employees, designers and consumers mingling and interacting at the level that happens here

[Chinorlz]

I must also tell you, some of you consumers dont want well priced, well made goods. it seems to me, there is some psychological factor at play, where people are more interested in buying the higher prices item and trying to get it on sale rather than getting a very good item that is decently priced even if the moderately priced item is as good or even better than the bigger ticket item. We offer some of the best made pants in this niche at a favorable price point, yet I get customers all the time who instead of respecting what we do are haggling about price and wanting the items at the cheapest possibly price they can get, even if it means $10 less............

One of the e-mails/PMs that I absolutely hate getting is that one.

"thank u for the price list, what is ur best price on _______ for me?"

[cjbreed]

there are several interesting bits in the article to me, a lot of which was mentioned in this thread

they didn't get the support from the labels that they wanted. (but what exactly could the labels do?)

tons of expensive priestly gowns and man dresses isn't really a good idea

so, what is the correct model now? flagship boutiques? or multi-label boutiques that offer more variety in terms of aesthetic and pricepoint, as has been suggested in this thread a few times. do you narrow yourself even further into your niche? or do you offer more diversity?

[Anomie]

Great article. Another point that I would add is that NYC has changed dramatically. It is extremely hard for creative types, even those with high incomes, to live in NYC. I also collect design and was almost as sad when Moss closed. Moss was in my opinion the design equivalent of Atelier. I simply do not think that there are enough people in NYC to support stores like Atelier and Moss. And in NYC given the cost of rent you need a decent percentage of local sales versus e-commerce.

[cjbreed]

i think that what DRRRK is saying, and BBS is a great example of this, is that no matter how much i like something, there comes a point where its just not worth it, especially when there are difficulties with the garment itself.

i was recently considering a pair of BBS pants that are ON SALE for about 900 usd. and the fit is more than a bit wonky, with the waist fitting huge and the leg fitting super slim. i was thinking i could have a tailor bring in the waist but then the crotch will be bunched up and then i remember that for $900 that shit needs to be perfect. so obviously there is no way on earth i would have paid full retail for it.

and this is not the retailer's fault. he didn't tell the designer what to make or how much to charge for it.

this example is not about the profit for the designer. its just another way of reinforcing the point that in A LOT of cases this stuff just isn't worth the asking price.

[zamb]

there are several interesting bits in the article to me, a lot of which was mentioned in this thread

they didn't get the support from the labels that they wanted. (but what exactly could the labels do?)

labels are doing what they can, and often times its called exclusives, often times designers do not sell to multiple stores in the same geographic location/ city. as a rule we dont. I know with the rise of e-Commerce, this has less of an effect than it used to, but its still valuable. also, a lot of times stores especially having special relationships with designers can request special materials/ colorways of certain products that no other store is carrying so that in a sense they are not competing on every level with other stores that carry the same brand.

so, what is the correct model now? flagship boutiques? or multi-label boutiques that offer more variety in terms of aesthetic and pricepoint, as has been suggested in this thread a few times. do you narrow yourself even further into your niche? or do you offer more diversity?

To me there is no singular approach, but a multi-pronged strategy is very much needed.
Diversity of esthetic, not necesarrily in a contradictory, but overlapping and complementing way is always a good thing. Diversity of price points is a very good thing too. this is especially a good thing for attracting new customers. for people who are used ot shopping on the cheap it takes time to overcome the psychological barrier of buying 2-4K leather jackets and coats when you have always gone to Zara and H&M. so to be intimidating and high and mighty when you are depending on increasing your customer base is actually a self defeating stance.

We personally have a webstore not because we are interesting in competing with the stores, but to offer a clearer and wider vision of what we do to the customers rather than having our vision of the company filtered through the personal decision making of store buyers.

of course one can carry on a business similar to the OFFICE, which only sells CCP, however a lot of considerations in terms of whether one wants to operate as a gallery is the way to go rather than functioning on the model of a traditional store.
there is room enough for multiple approaches that are still relevant........lastly but most importantly, we have to take responsibility for our own personal mistakes in our failures rather than blaming changes in the industry or decisions by others, we at some point must look inward and asses our own failures to adapt as part of the problem.