Leather goods, hats dress up fashion accessories - discount store top-selling categories - Hot Growth Categories

Discount Store News, Oct 2, 1995

The soft apparel market does have a bright spot: fashion accessories, a category that boasts the highest gross margin of any segment in apparel.

According to DSN research (Annual Productivity Report, Aug. 7), accessories on average yield a 39.9% gross margin for full-line discounters and turn at a rate of 4.3 per year.

According to Abe Chehebar, president of vendor Accessory Network, retailers are more focused than ever on improving sales per square foot and doing more business with less inventory. "They are starting to get into the science of accessories," he said, which is "a small piece of the business, but one with good turn and margin. A consumer on a budget can spruce up an outfit and feel good" without a major cash outlay.

Among the subcategories offering continued oomph in coming months, according to retailers and vendors, are watches and fine jewelry, handbags and backpacks, belts and straw hats.

Retailers are so bullish about the prospects for fashion accessories over the coming 12 to 18 months that more than one in 10 named fashion accessories as among the product categories with the greatest growth potential, according to exclusive DSN research.

Individually, retailers are setting their sites on different parts of the fashion accessories business.

Mark Minsky, senior vp, gmm, soft lines at Caldor, said his chain likes to surf the changing demand cycle for leather and suede looks in handbags and backpacks. Caldor's merchants used leather as a key style factor in bags during fall '94, pulled out in spring '95, brought it back tentatively this fall and are now pondering whether to go broader with the look.

"We are reconsidering leather for Holiday," Minsky said, "in some backpacks and mini-backpacks." Why leather? "It gives overall velocity to the department," he said, noting that leather does not always fetch the highest price points.

Sandy Sansevera, dmm accessories at Ames, said his chain has emphasized upscale color block styles in organizer bags that peak out at $12.99, a higher price point than last year.

Eric Flodberg, vp, dmm at Pamida, said his chain will definitely add more leather to its handbag assortment. He said this move is part of the general "trading up" of the customer to better quality goods. He added that while licensed goods are critical for the children's accessory department, such items as tote bags with Looney Tunes characters are just as important in the women's assortment.

Cecil Kearse, vp, gmm for men's and children's apparel at Kmart, said team licensed looks still provide good sell-through in baseball caps. He believes some shoppers collect or swap them each season.

Meanwhile, straw hats are gaining interest. "Some of it is fashion, people looking for something different than the baseball shape," Kearse said, along with interest in preventing over-exposure to the sun's ultraviolet rays. Kearse lauded hat makers for "an awful lot of development to make straw dressy, and make the straw hat body hold its appearance better."

Peter Cote, a sales staffer for straw hat resource Biltmore, agreed that UV-ray protection has become a selling point. To capitalize, Ontario-based Biltmore has produced a line especially for golfers.

In belt selections, different weaves, leather treatments and buckle designs keep freshness, Kearse said. He said that a new belt can "jazz up" a wardrobe that already has a full complement of five-pocket jeans.

Les Weiner, vp sales at Tiger Accessories, said retailers' orders for boys' belts and suspenders have gained some momentum as a result of the new emphasis on voluntary uniforms at public schools. "As a niche, it has given us a big lift at Target and Wal-Mart," he said.

Sansevera said that watches are among the strongest fashion accessories today, with the best sell-through coming in the $19.99 to $39.99 range, "mainly supported by Timex and other brands with good outdoors looks."

In jewelry, 14-karat and 10-karat gold earrings continue to ring well at Ames. "Bi-color gold is important," he said, giving bounce to sales of earrings and bracelets. Ames is seeking to expand crystal miniatures, a gift selection merchandised with jewelry. A single counter-top display with goods priced from $9.99 to $29.99 produces incremental sales, he said, noting that the business is strongest in rural areas.

By continuing to test new looks in accessories and by cross-merchandising with the gift-buying shopper in mind, discounters see more room for growth in this small but important category.