Doneger: tailored to fit the times - Doneger Group President Abbey Doneger; apparel retailers turn to buying offices to help boost sales - AM

Discount Store News, Oct 16, 1995 by Susan Reda

By now the tale is familiar. Dogged by anemic sales, continued consolidation, Chapter 11 filings and obstinate consumer malaise, apparel retailers are searching for solutions and pursuing every opportunity for growth.

Not so familiar, however, is the role that some buying offices are performing as they attempt to help mitigate retail acts that in the past were fresher in terms of bottom-line results. Much like accounting firms, which no longer simply keep the books and have in fact become broad-based business consultancies, buying offices are attempting to play bigger parts in their customers' businesses.

"The term `buying office' is limited in scope," stresses Abbey Doneger, president of The Doneger Group, a New York-based resident buying group. "Our services extend far beyond what a buying office traditionally provides. We delve into all areas of merchandising and marketing. Our objective is to help retailers generate increased sales and profits, gain market share and realize their full potential."

With an extensive client list that runs the gamut from high-end department and specialty stores to middle-market mass merchants and one-price budget formats, The Doneger Group operates from a unique perspective. Management is able to assess opportunities and obstacles from both a broad industry-wide outlook and a narrow vertical view.

"We use them [The Doneger Group] in certain areas a lot. Before we go out into the market, we go to Doneger first for trend information and vendor direction," says Mark Minsky, senior vp. gmm, Caldor.

"When we started a dress business a few years back, we were able to soak up a lot of information from them. For this fall, they helped us by recommending resources and honing in on key items for ladies' leather outerwear, a new category for us," Minsky adds.

With pricing more important than ever in today's market, it is not surprising that Price Point Buying, Doneger's off-price service, has taken on a more critical role at the company.

This division, formed in 1988 and now headed by merchandise manager Marvin Goldstein, specializes in opportunistic buying of overruns and merchandise made available because of canceled orders.

The scope of Price Point Buying has been amplified recently as mass merchants test new programs, plug up holes in their assortments and work to keep the selling floor stocked, despite the squeeze of skittish factors that have become somewhat overprotective of their accounts receivable.

"Large-scale retailers typically do not have the flexibility to react to the opportunities of off-price purchasing because the size of their businesses dictate that product development and orders be set well in advance," explains Thomas Bums, senior executive vp and gmm of The Doneger Group.

"The current retail environment has, however, opened some new doors for us. With retailers planning inventory much closer to the vest than in previous seasons. they sometimes find themselves on the short end of supply," says Burns. "We have the capacity to go into the market, find what they're looking for at the price they want to pay and deliver it to them in an efficient time frame."

Among the items Goldstein and his staff of eight have been chasing for fall are denim jumpers and vests. Typically, Goldstein relies on both his buyers and those in the women's sportswear area of Doneger to piece together a working list of vendors who have product available at the right price.

"For retailers, the name of the game is right product, right price and right time. They have to have something when it's hot--particularly since key items have been few and far between," says Goldstein. "For us, it's a question of synergy--of working with the other divisions under the Doneger umbrella of services to respond to a retailer's needs."

In the wake of several Chapter 11 filings at a number of retail chains across the country, Doneger's Price Point Buying team has been called upon to help fill in some gaps on the selling floor. According to Bums, once a factor puts up a red light, merchants have to seek out new resources that are willing to be supportive. Merchants, overwhelmed by the task of finding manufacturers that meet their quality, value and price parameters, rely on Doneger's expertise. Rose's, which successfully emerged from bankruptcy protection in May, was one of the companies that utilized Doneger's sourcing skills when it needed help stocking its shelves.

Selling is of course a two-way street. A red light at one chain translates into manufacturers being left with fast-depreciating inventories. Vendors call on the Price Point Buying division to rid themselves of the merchandise quickly and cut their losses.

"Price Point Buying is essentially a push and pull business," says Bums. "The push comes from the market side as manufacturers look to sell off in-season product, which tends to lose value every day. The pull comes from retailers who have specific needs and are looking to secure product."

When recent changes in quotas and issues surrounding labor resulted in the canceled parts of retailers' product development programs, merchants looking for immediate sourcing-montgomery Ward and Pamida, for instance -- tapped Doneger's services.