Furiously Fast Fashions

Industry Standard, The, June 11, 2001 by Joanne Lee-Young, Megan Barnett

The big cloything stores rotate styles on and off the racks quicker than ever. Their secret: Hong Kongs Li & Fung, one of the speediest suppliers on Earth.

THE EXPRESS STORE ON MANHATTAN'S Fifth Avenue couldn't have a more fitting name. The trendy retailer, owned by the Limited, is all about speed. The techno beats pulsating from speakers overhead set the tone for young shoppers rifling through racks of sequined halter tops and colorful capri pants. There isn't much time to ponder options or return next weekend with a friend for a second look. By then, there'll be a whole new set of clothes on the floor - and most of today's fashions will be gone.

"We rotate the front of the store every Thursday," says a young Express clerk folding cotton tank tops. "The changes are getting faster and faster."

At retail stores across the country, new styles are hitting the floor faster than ever before. For years retailers offered only four cycles of fashion every year: spring, summer, fall and winter lines. When the spring shipments arrived, the leftover winter inventory went on sale. That well-worn approach has gone the way of stretch pants. "Now stores get a new delivery every two weeks" says Jane Werner, associate professor of fashion merchandising management for the Fashion Institute of Technology.

Among the megamall standbys constantly shuffling inventory today are Abercrombie & Fitch, Banana Republic, Club Monaco and Gap. You've got your Valentine's Day boxers, your spring slickers, your Easter linen, your summer dresses, your cruise-line wear, your poolside gear, your back-to-school ensemble, your mid-fall evening wrap, your Thanksgiving best and your winter holiday glitter, to name a few.

"Our effort to fast-track items is a fairly new strategy," says Stacy MacLean, a Gap spokeswoman. Gap still loosely bases styles on four seasons, but refreshes its stock each month with new fashions in response to consumer trends. "We look to items in key categories -- like denim or T-shirts -- as opportunities to get items to market quicker if we identify a trend earlier than expected," adds MacLean.

WHAT'S BEHIND THIS DIZZYING pace of change? You can blame the MTV-induced short attention span of today's youth, who happily jump from fad to fad. "You're only going to want to wear your abstract print top three times before you're ready to move on to something else," says Marcia Aaron, retail analyst for Deutsche Banc Alex. Brown. Or per haps it's the growing hoard of fashion designers who seem to turn every pop culture moment -- be it a new Madonna video or the recent Jackie Onassis exhibit -- into a new clothing trend. But most of the credit, it seems, goes to the fact that speed in retail is now possible, thanks to the potent mix of globalization and information technology.

Competition from overseas retailers is pushing U.S. stores to be ever more responsive to changing styles. The popular Sweden-based chain Hennes and Mauritz, or H&M, recently moved into the market for affordable high-end fashion in the Northeast, with stores open in Connecticut, Massachusetts, New Jersey and New York. Then there's Spain's Inditex, which had a high-profile initial public offering in May. The very profitable retailer recently made a splash landing in the States with its Zara stores -- think European styles at Gap prices -- opening six outlets in the New York area.

Zara brings to the United States its penchant for changing stock every two weeks, forcing other retailers to play by new rules. But that's not all. At Zara, an item of clothing can go from concept to cash register in just five weeks. That's lightning fast compared with Gap, which generally has a nine-month lead time. "People want what they want the moment they want it" says an Inditex representative.

The new focus on speed and change would not be possible without the spread of high-tech communications in retail. From the stores and the middlemen taking orders to the suppliers and manufacturers producing the garments, technology has given retailers the ability to quickly assess shifting consumer demand and adjust the volume and style of their orders -- often in midstream. "In the past, manufacturers were never able to supply new merchandise as fast as they can today," says the Fashion Institute of Technology's Werner.

At Zara, computers at the outlets in New York feed data directly to a state-of-the-art factory in Galicia, Spain. If the data shows that the yellow summer cotton shirt isn't selling, Zara can quickly change the color to purple or add a pocket and bigger buttons.

Playing catch-up to fast flyers like Zara, Gap just announced that software company Retek will upgrade its technology for sourcing, inventory management, merchandising and distribution. "Retek's software and services will help give us greater speed and flexibility," said Gap CIO Ken Harris.

SOME RETAILERS, INCLUDING GAP AND Zara, manage their own manufacturing to retain control over the process. "It is best if we do it our selves," says Hansel Wong, VP of operations for Gap's sourcing office in Hong Kong. "We feel that we are on the pulse more when it comes to changes in trends." But an increasing number of retailers are handing this responsibility over to outsourcing companies. And no outside firm is as powerful - or as fast - as Li & Fung, a high-tech wonder located in a gritty, industrial area in Hong Kong.