Contemporary roundtable: The boys club

Specialty store retailers share insight into the changing contemporary market.

Many retailers are reporting positive results in contemporary business for 2011. Have you been experiencing similar increases? What do you attribute them to?

Todd Epperley, Halls: Yes, our contemporary business is up high single digits. Contemporary as we’ve known it has changed dramatically. The modern guy in the Midwest has picked up on the preppy look in a major way and continues to drive our business. What looks fresh to us are lines like Gant and Ralph Lauren. Some might say that those lines are not contemporary, but to me, they look more modern than some of the brands that are considered contemporary. Challenging are collections that are dark, solid and look the same season after season. We’ve always had mid-tier pricepoints but are focusing more on this range and targeting it in our advertising and visual concepts. Results from a major customer survey told us that we need more of an offering here. So instead of featuring only high-end collections in advertising, we’re mixing it up and showing RLX fleece at under $100 vs. a $3,000 leather.

Jon Cotay, Akira: Last year was our best year so far—we were up 30 percent from the previous year. We’ve really hit our stride and diversified our product mix. We went from six to 14 stores in the last two years. Our employee count has increased to 220 and we’re expecting to hire 30 to 50 more employees for our four new locations, bringing our store total to 18. We’re having great success with our e-commerce site, ShopAKIRA.com, which currently only sells women’s but will add men’s for fall. We’ve put an emphasis on our online presence. Through our website, we’ve worked with some of the best fashion bloggers around and have been getting placed in national and international magazines. Our biggest challenge is our own incessant drive to take things to the next level. We’re always looking to become more efficient, streamline our approach to management, and make our customers and vendors happier. We haven’t made any dramatic changes and have always been all about mixing prices. Our business has been bolstered by marketing initiatives since day one; it’s our lifeblood. We host or participate in between 15 to 20 events a month.

Gary Ritacco, Uniform: Business has been awesome for us. We have had consistent increases each month and did not have to break sale until mid-July. Season-to-date we’re up 15 percent. Woven shirts are always our most successful category, followed by pants/shorts/swim, and next are knit tops. Our most challenging category is skincare (which really isn’t such a big deal). We’ve taken a proactive approach to social media (blogging, Facebook, Twitter) and found it useful in driving business forward. We’re also events driven and host three to four a season.

Don Zuidema, LASC: Business is better than last year (single digit increases) and we’re reacting quickly when we see an item or category perform to maximize sales. The challenge for us is to be as on-point as possible with buying and controlling inventory while staying actively involved in the daily part of the business.

Blake Nieman-Davis, Blake: We moved into a larger store a year ago in August (from 1,000 sq. ft. to 3,700 sq. ft). We’re in an old Smith & Hawken space and we have this 300 sq. ft. greenhouse, so we’re opening a coffee shop inside the store. It’s important to have other things going on in the store besides apparel. The wave of the future for smaller retailers is collaborating with apparel and non-apparel partners. We’re opening a RRL shop-in-shop in September (250 to 350 sq. ft.) I don’t want to make the entire store shop-in-shops, but RRL is an important brand and fits within our aesthetic. The move was great for us and business has proven that. May was the biggest month we’ve had in the history of the store and we’re having overall increases. More space doesn’t always translate to more sales, but the ability to show things off has helped.

Let’s talk denim: what styles, pricepoints and brands are selling best? Has the recent buzz in non-denim bottoms translated in sales? Is it taking a significant piece of the denim pie?

Ritacco: Denim is okay. It’s up 4.5 percent for the season and that’s totally driven by Levi’s. We’ve dropped premium denim considerably, specifically Diesel. I could use some denim advice! I’ve looked at Naked and Famous and really like it, but I’m afraid it might be too forward for my dude.

Nieman-Davis: We’re a denim store—our assortment is over 50 percent denim. We’re selling more jeans than ever before and there’s less competition. Traditionally, we’ve had trouble selling lower-priced jeans with the exception of some brands like Cheap Monday. If a brand is less than $150 we just can’t sell it and that hasn’t changed during the shift in the economy. Our customer comes to us for designer or limited-edition jeans and in their minds pricing equates to quality, and for some reason I can’t get them to buy lower-priced denim. With that said, I’m really excited with what’s going on at Big Star and am excited to have a really great jean in here for $99. We have two different men’s denim customers. On one side it’s the denimhead (opening price is A.P.C or Naked and Famous at $150 to $175 but the average pricepoint is $280). This guy wants something limited, cool and in small batches, so we do well with RRL, Kicking Mule, Raleigh and Edwin. A lot of this business is raw denim. On the other side, it’s our basic designer denim customer ($180 to $220). Here we’re selling Citizens of Humanity, Joe’s Jeans, AG and J Brand. The silhouette is a straight leg, but not skinny.

Cotay: Denim business has been stable and consistent this past year. We haven’t seen any big decrease, but we haven’t seen big increases either. In terms of premium denim, we do well with Hudson, Kasil, Genetic and PPD. In terms of mid-range denim, we’ve been excelling with Buffalo, Mavi and Big Star. In regard to specific styles, the Chicago market has finally accepted straight-leg jeans.

Zuidema: Denim sales are slowly picking up, but I think it will be some time before, and if, they return to the demand we saw a few years ago. Our bestselling brands are G-Star, Diesel, Stitches and Nudie. Pricepoints under $200 continue to do well, although higher pricepoints are selling as long as there is “perceived value” in fit, wash, or hand-detailing.

Epperley: Our denim business is flat. It’s not as much about pricepoint for us, most of our bestselling styles are still over $200 and straight leg is still key. Denim brands need to be careful. We’re always concerned when they open mid-tier department stores. It’s not good for their brand or our business. Just look at all of the brands that have gone out of business after they overdistributed. We’ll discontinue brands that get too greedy with distribution. While the slim chino is hurting the denim business, it’s not happening in a major way. Diesel, True Religion, 7 For All Mankind and Nudie continue to be key brands. In my opinion, Nudie and Diesel have done a good job protecting their status through distribution, which is important to long-term growth.

How has the proliferation of flash sale sites impacted business?

Epperley: Off-price websites probably are impacting our business but we can’t gauge the impact. They’re the new outlet mall of today. We focus on great customer service and a point of view. Most customers would rather come in and have a member of our sales team help him with a pair of jeans that fit him. A guy will take six to 10 pairs into a fitting room to find the perfect fit. Good luck with that on a website. Yes they can get the style number from us and order online. Shame on the vendor for selling them current goods. When sell-through goes down on a line consistently, we move on. This will be the gauge of vendors being on the off-price websites.

Ritacco: I am constantly having this same conversation with my vendors. Off-price sites are the bane of our existence and the hardest thing to combat, but I think we’re doing a pretty good job. My assistant and I are constantly looking at off-price online retailers every day. It’s a huge challenge, but our best weapon against them is our awesome customer service and because of that we’ve built an amazing customer base.

Cotay: We do the same and go above and beyond in terms of our service. As part of our customer loyalty program, our shoppers get perks for frequent purchases, previews to exclusive events around the city, and close, enduring relationships with our stylists.

Nieman-Davis: Gilt popped up at a time when the economy was bad and when there was a lot of excess merchandise. Now brands are making less merchandise and will start makeing things specifically for the website and customers are never going to know the difference. Those websites haven’t really affected us much and probably don’t as much as they would in NYC or LA. Everything is so price-driven and it’s hurting the industry. We’re one of the only industries where people will come in and ask for discounts. We’ve created this feeling that our stuff is marked up so high that we can just afford to mark it down and that’s not true. Markdowns are a reality, but it’s not good business and we need to get away from that.

Zuidema: Off-price websites are a part of the business and so we are making sure that our customers understand the value of a knowledgeable and service-oriented sales staff. We continue to have all sales associates develop their client books and we are doing in-store promotions with vendors to draw customers in.

What excites you most about 2012? What’s keeping you up at night?

Epperley: Less plaid excites me! I’m impressed with vendors like Rag & Bone, which are focusing a portion of their business on key items. This will help us with profitability and sales volume and we’re seeing this with many of our key partners. What worries me is overdistribution of key brands and vendors need to be careful with their pricepoints.

Nieman-Davis: I think Rag & Bone has gone back to the drawing board and dropped their prices. They were getting very expensive and it seems like they knew it and did something about it. I saw some life changing brands for spring 2012—a brand called Capital that I’ve wanted for eight years but it was never available in the U.S. until now. I’m always hunting out fun, innovative contemporary lines like Wings and Horns, Anachrome, Field Scout and Batten. I’ll continue to look for really cool, well made, price-driven stuff in the streetwear vein (brands like Obey and Comune). What keeps me sharp and honest is not getting too comfortable or too confident. I’m always looking for interesting ways to keep people interested in my store.

Ritacco: I’m excited by the color palette. There are some really awesome soft, muted blues and purples and grays that I think will translate really well. What worries me? More online sites selling stuff at cost. Vendors need to be better at servicing their independent stores throughout the season and keep us abreast of any goods that they’re selling to off-price online retailers. They should be offering them to us first. We’re their front line!

Your wish list: what do you need from the market that you’re not getting?

Epperley: What’s after prepster? In the Midwest, we’ll always have that customer. Lines like Vineyard Vines, Southern Tide and Lacoste continue to be great volume drivers on our denim floor especially by developing new items and a slimmer fit. But the so-called contemporary brands need to develop something to replace preppy and heritage for fall 2012 (it’s still key for spring ’12).

Nieman-Davis: We’ve always had a focus on American-made product since we opened eight years ago. It’s obviously a huge trend right now, and that sort of puts me off a little bit. Now that everyone is doing it, it makes me want to go in a different direction! So we’re going to focus on heritage brands not made in the U.S. Brands like S.N.S. Herning who makes amazing sweaters out of Denmark, Armor Lux out of France and Barbour from the U.K. Barbour finally came out with a contemporary fit, so we picked up the line for fall and are even setting up a waxing station in the store so people can come in and wax their own cotton jackets.

Zuidema: After the New York shows my partner and I both came away with a feeling of “sameness” from many of the current vendors. We are actively seeking out new designers in hopes of bringing something fresh to the selling floor and giving our customer a reason to spend.

Cotay: That’s what I’m missing—independent designers. Since the cost of appearing at a trade show has increased, the industry has lost some of its sense of individuality and its fresh, creative energy. Many young designers have great ideas but can’t afford to set up a booth at a trade show, so they don’t receive the exposure that they otherwise could.

Ritacco: I need better/tighter shipping windows! Knowledge of canceled styles before the 11th hour! Collections that ship as collections and not in pieces! Fair shipping costs. Those are all a good start…

Nieman-Davis: I would love to put together some kind of contemporary buying group. I was talking to a store owner in California and she told me how she renegotiated her UPS rates and saved a ton of money. I had no idea you could even do that! I want to get a group of retailers from all different parts of the country together to talk about what is working and what’s not in order to help and learn from each other. It seems like an outdated concept, but I think it’s time to bring it back.