Crain's New York Business, August 4-10, 2008
Retailers Play The Top Card
By Adrianne Pasquarelli
To get on top in the tough economy during this back-to-school season, New York's apparel retailers are depending on, well, tops. With skinny jeans and plaid skirts a holdover trend, consumers are expected to simply freshen their wardrobes with new shirts and jackets.
The retail landscape is bleak. Several chains, including Steve & Barry's, Goody's and Mervyns, have declared bankruptcy in recent weeks. Kmart, Talbots and the teen accessories retailer Claire's might also be in trouble, according to industry insiders.
In preparation for a crucial season, New York specialty shops like Olive & Bette's and Wink are putting their best blouse, blazer or jacket forward. Many chains, including Aeropostale and Macy's, are discounting prices for T-shirts and crisp blouses, which they're promoting to teens trying to emulate the trend popularized by Gossip Girl, the CW network's hit show.
"Across the board, tops are driving a lot of the business," says Lori Holliday Banks, a senior analyst at fashion consulting firm Tobe. "If you're sitting at a desk or a table, people notice what you're wearing on top, not bottom."
Last year, back-to-school sales of apparel for kids aged 7 to 17 generated revenues of about $10.6 billion, according to trend tracker NPD Group Inc.
Retailers require all the help they can get this year: Consumers are shopping less-and spending less when they do. A recent Deloitte survey found that 56% of New Yorkers plan to cut back their spending for back-to-school items.
"Back-to-school this year is going to be more of a massive headache than a fun experience," says Candace Corlett, president of WSL Strategic Retail. Sensing this, retailers are reacting by offering top-of-the-line items.
Sweater weather
Olive & Bette's, which has four Manhattan boutiques, expanded its sweater inventory by 150% this year. It's also increasing its blouse and T-shirt stock. Owner Stacey Pecor is betting that a $250 open-front cashmere hoodie, layered with bright knit T-shirts, will appeal to teens who want a preppy schoolgirl look. She is cautious about bottom sales and is maintaining flat inventory levels.
"In pants, we've looked for some newness but can't seem to find it," Ms. Pecor says.
Collegiate tees have been a favorite among the back-to-school crowd, and Scoop Kids is stuffing the shelves with them, along with other sportswear like cardigans and vests.
To encourage back-to-class buying of its preppy argyle knits, graphic T-shirts and patterned scarves, J. Crew is mailing its credit card holders $25 reward cards.
Meanwhile, Wink, a New York company whose three boutiques are all in the city, is banking on versatile tops and jackets to bring traffic to its stores.
"We're seeing a lot of silk blouses and things that can be tucked in-it's very Gossip Girl-inspired, but our customer will put her own twist on it," says Sara Mattler, Wink's senior vice president of merchandising.
Larger retailers are also focusing on tops but keeping inventories lean and items inexpensive. Aeropostale, with 814 stores, expects that printed T-shirts will be hot items. In keeping with its discounting tradition, the chain is selling the tees at half-price and is also offering reduced-price polo shirts and sweater vests.
Aeropostale posted a net profit of $17.5 million for the first quarter, ended May 3, a 27% increase over the year-earlier period, but inventories were down 1% year over year, as the company is wary about cost-conscious shoppers.
Department store dilemma
Giant Macy's is also stressing slender upper body silhouettes by offering four pages of new tops for juniors on its Web site. The much-troubled department store needs such enticements to draw young shoppers. Net same-store sales for the quarter ended May 3 were down 2.6% from a year earlier, and the company listed a $59 million loss for the period.
"Kids look at Macy's and ask, 'How does this work?' " says Bob Grayson, co-president of retail advisory firm Grayson/Hughes. "They've grown up with stores like Aeropostale, Abercrombie and Forever 21; they don't understand the department store."
Retailers Play The Top Card
By Adrianne Pasquarelli
To get on top in the tough economy during this back-to-school season, New York's apparel retailers are depending on, well, tops. With skinny jeans and plaid skirts a holdover trend, consumers are expected to simply freshen their wardrobes with new shirts and jackets.
The retail landscape is bleak. Several chains, including Steve & Barry's, Goody's and Mervyns, have declared bankruptcy in recent weeks. Kmart, Talbots and the teen accessories retailer Claire's might also be in trouble, according to industry insiders.
In preparation for a crucial season, New York specialty shops like Olive & Bette's and Wink are putting their best blouse, blazer or jacket forward. Many chains, including Aeropostale and Macy's, are discounting prices for T-shirts and crisp blouses, which they're promoting to teens trying to emulate the trend popularized by Gossip Girl, the CW network's hit show.
"Across the board, tops are driving a lot of the business," says Lori Holliday Banks, a senior analyst at fashion consulting firm Tobe. "If you're sitting at a desk or a table, people notice what you're wearing on top, not bottom."
Last year, back-to-school sales of apparel for kids aged 7 to 17 generated revenues of about $10.6 billion, according to trend tracker NPD Group Inc.
Retailers require all the help they can get this year: Consumers are shopping less-and spending less when they do. A recent Deloitte survey found that 56% of New Yorkers plan to cut back their spending for back-to-school items.
"Back-to-school this year is going to be more of a massive headache than a fun experience," says Candace Corlett, president of WSL Strategic Retail. Sensing this, retailers are reacting by offering top-of-the-line items.
Sweater weather
Olive & Bette's, which has four Manhattan boutiques, expanded its sweater inventory by 150% this year. It's also increasing its blouse and T-shirt stock. Owner Stacey Pecor is betting that a $250 open-front cashmere hoodie, layered with bright knit T-shirts, will appeal to teens who want a preppy schoolgirl look. She is cautious about bottom sales and is maintaining flat inventory levels.
"In pants, we've looked for some newness but can't seem to find it," Ms. Pecor says.
Collegiate tees have been a favorite among the back-to-school crowd, and Scoop Kids is stuffing the shelves with them, along with other sportswear like cardigans and vests.
To encourage back-to-class buying of its preppy argyle knits, graphic T-shirts and patterned scarves, J. Crew is mailing its credit card holders $25 reward cards.
Meanwhile, Wink, a New York company whose three boutiques are all in the city, is banking on versatile tops and jackets to bring traffic to its stores.
"We're seeing a lot of silk blouses and things that can be tucked in-it's very Gossip Girl-inspired, but our customer will put her own twist on it," says Sara Mattler, Wink's senior vice president of merchandising.
Larger retailers are also focusing on tops but keeping inventories lean and items inexpensive. Aeropostale, with 814 stores, expects that printed T-shirts will be hot items. In keeping with its discounting tradition, the chain is selling the tees at half-price and is also offering reduced-price polo shirts and sweater vests.
Aeropostale posted a net profit of $17.5 million for the first quarter, ended May 3, a 27% increase over the year-earlier period, but inventories were down 1% year over year, as the company is wary about cost-conscious shoppers.
Department store dilemma
Giant Macy's is also stressing slender upper body silhouettes by offering four pages of new tops for juniors on its Web site. The much-troubled department store needs such enticements to draw young shoppers. Net same-store sales for the quarter ended May 3 were down 2.6% from a year earlier, and the company listed a $59 million loss for the period.
"Kids look at Macy's and ask, 'How does this work?' " says Bob Grayson, co-president of retail advisory firm Grayson/Hughes. "They've grown up with stores like Aeropostale, Abercrombie and Forever 21; they don't understand the department store."
