Longing for the next big label: PL lines and high-end trickle-down keep mass in the mix - apparel & accessories

DSN Retailing Today, Dec 15, 2003 by Emily Scardino

Fresh off a year that saw its share of ready-to-wear hits and misses, apparel merchants are looking to 2004 with hopes that the inevitable shifts in mindset by the ever-fickle apparel consumer will bring them more good fortune than bad. To take some of the guesswork out of the equation, it helps to know how to hedge on trends that are at the beginning of their lifecycles and which have run their course--especially going into a year like 2004, which, according to The NPD Group and Meridian, is expected to produce flat category revenues.

Among the recurring trends for 2004 is the jockeying for consumer favor between national and proprietary brands across the men's, women's and children's wear markets. How they've merchandised and who they reach greatly varies, but unequivocally brands matter--whether they represent fashion, quality or simply value.

Of these, ethnic brands are particularly important. New, often-proprietary lines make retailers destinations for the diversifying population. Many, including Kmart and Sears, are focused on Hispanics--the fastest-growing cohort.

Kmart is reportedly expanding its Thalia brand next year, based on the eponymous Mexican pop star. Sears just introduced new urban in-store shops featuring lines like Mecca that it hopes young men's customers will look to instead of specialty. For boomer-aged female Hispanics, Sears also has an exclusive with fashion designer Lucy Pereda.

Designer brands are equally vital to growth in the discount channel; they are increasingly accessible for proprietary exclusives. As the department store channel flat-lines, more and more are migrating downward. Bringing fashion to the masses, Isaac Mizrahi's successful new missy line for Target featured some of the '80s neon brights expected to sell well across juniors and girls' marketwide in 2004. Consumers are already buying stylish Levi's at Wal-Mart. The question is not if other brands will move downstairs, it is when. As in, when will CK or Tommy Hilfiger be next to make the move?

Designer and ethnic brands are not the only ones gaining momentum. Lines targeting traditional baby boomer customers are also ascendant. Discounters know that middle-aged moms and grandmas are shopping their stores for consumables but have famously had trouble selling them apparel. To create a buzz, Target is adding new lines for 2004 aimed at boomers, Linden and Breakwater.

Boomers are also buying branded apparel for their children and grandchildren, making girls' and boys' sales in soar. Whether a celebrity-driven line, like mary-kateandashley or Sean Jean, or a classic children's wear name like Gerber or Carter's--which launched a successful mass exclusive in 2003--brands have built-in purchaser appeal.

Of course, a host of diverse fashion trends, color palettes and design details will also affect apparel sales next year--but diversity is a keyword. In an era of personalization, there are few one-size-fits-all fads. Hot pink 1.e.i. tracksuits in juniors at JCPenney and taupe George suiting separates in misses at Wal-Mart each have their niche. Neutral khakis and plaids pervade in traditional men's lines, including Dockers and Timber Creek, while Bugle Boy and JNCO continue the trend toward flashy appliques and baggy bottoms in young men's wear. Quilted, felted and textured fabrics will help update bestsellers.

Some big-picture fashion trends, like activewear stylings and denim-as-sportswear, will continue gaining momentum. Dressier lines, like Target's Merona and Wal-Mart's George, meet the trend toward offering career-appropriate wear at mass, as the workplace shifts away from casualwear. Recent research from McKinsey & Company, a management consulting firm, indicates that categories including dresses and sportcoats are where mass still stands to pick up customers.

Meanwhile, high-end innovations like stain resistance will continue driving sales in men's wear, where function often supercedes fashion.

Despite drab sales, there are bright spots in apparel for 2004. These macrotrends are already improving sales for early adapters and look to turn things around by 2005.