RETAIL ROUNDTABLE: NAVIGATING THE STORM

At the end of the worst year most menswear merchants have experienced in their lifetimes, MR gathered a few of the best to discuss what’s working, what’s not, and what changes are needed. Here, excerpts from our discussion.

Q: So, how bad was it really?

Dan Farrington, Mitchell Stores: Tailored clothing has fallen off the cliff and while sportswear volume cannot make up for those losses, we started December with some sportswear increases that continued through Christmas. So we ended up with one of the best holiday sportswear seasons in our history (just shy of 2019). This was a big win for us but bottom line, it’s been a tough road. Mandated store closings in certain parts of the country didn’t help.

Q: Can you specify what within sportswear has been selling?

Farrington: Our customers are buying casual, active-inspired, and in some cases less expensive sportswear. We’re doing well with Faherty, Rhone, Fourlaps, Wahts, Sease. And also with loungewear/athleisure: hoodies, joggers, etc. And even some luxury casual: Loro Piana, Moncler, Zegna active…

Although online is not a huge part of our business, it’s invaluable now as a selling assist. But most business is done through the store, either in-person visits or via Facetime.

Ken Giddon, Rothmans, NYC: Our situation is similar: tailored clothing is virtually non-existent. Except for an occasional wedding, the only reason a guy buys a suit is if he’s gained or lost weight. Our normal mix is 60 percent tailored clothing; for fall ‘20, our “buy” (or what we actually took in) was less than 5 percent.  For fall ‘21, I’d expect us to get back to 50 percent as I predict a swing back to men dressing up. 

But for now our best sellers are fun sweatshirts; hoodies from our proprietary maker are killing it. Our sportswear business is way up, but on a very small base.

Rich O’Boyle and Jim Foley, Woodbury Men’s Shop, Long Island, NY: We did a decent clothing business early in the summer for backyard weddings but no more. What’s selling now: sportcoats and jeans, luxury sweaters, knitwear, corduroy five pockets, athleisure. Strong brands include Fedeli, Fiorini, Gran Sasso, Good Man Brand, Luciano Barbera… We’ve just added e-commerce; it’s our first season and we’re selling denim and knitwear.

John Braeger, Garys, Newport Beach, CA: We’re selling casual sportswear and footwear, thanks largely to a few great clients. In fact, one of our top clients (who always recommends us to his friends) recently asked if we would host a group of guys for a shopping night at the store. So we closed the store at 5:30 and hosted seven guys and their wives. We sent out a survey beforehand, asking their size, their personal style, their favorite cocktail. We had everything ready for them and for two hours over drinks, the guys shopped. (And so did the ladies: our custom shoemaker makes fabulous women’s shoes!) We did $70,000 in two hours and had lots of fun… (The store is big enough to spread out; everyone wore masks and had their temperatures taken.)

Andy Weil, Pockets, Dallas, TX: Our tailored business is also way down but we’ve had decent sell-throughs on softcoats, casual shoes, knits and sweaters, even lightweight outerwear. Key brands include Faherty, Fedeli, Andrea Venturi. We’re lucky that our customers really want to support us so they’re shopping. We don’t have an online business so they’re coming into the store or else we facetime and email photos.

Wally Nayman, Kilgore Trout, Cleveland, OH: Our government shut everything down early so it’s been a nightmare getting people to overcome their fear. Still, our store is big enough (9,000 square feet) to spread out and some things are selling well, including lightweight leathers from Gimos. It’s all about relationships. The one thing that’s really surprises me is that, counter to trend, our men’s business is doing better than our women’s.

Farrington: Our women’s is performing better than men’s and if you include fine jewelry, women’s is way ahead. Fine jewelry is the one division that’s lost very little ground.

Q: Based on what you’ve learned from the pandemic, how are you reinventing your business?

Nayman: I learned that there’s a lot of fat in our business so we’ve begun to manage expenses in line with the new reality. Already, I’m in a better position now than I was in pre-pandemic. We hired a sharp office manager who found tremendous savings: instead of leasing a copy machine for thousands a year, we bought one for $600. Instead of a mailing machine, we’re buying stamps. We’re seeking out competitive bids from IT people. All these small savings add up.

We also learned to accelerate our move to casualization at warp speed. We have to be nimble enough to react to what’s selling without overbuying. Yes, we need fresh product but I’d rather chase it than be stuck with it. Our advisor (Steve Pruitt) says we can’t be too bare but our mix needs to be more focused. Interestingly, every luxury product we’ve brought in has sold to the piece. So while we’re getting killed in tailored, I believe luxury sportswear and outerwear can ultimately replace that volume.

Braeger: Manage expenses? I’m now personally handling shipping and receiving: with so little product coming in these days, we don’t need a full-time person back there…

Giddon: We too started looking at every little expense, even contacting the mob to negotiate trash removal, examining compensation structure, vendor profitability, etc. As my brother says, “Anyone can run a business when times are good…”

But more than anything else, this pandemic has taught us who are friends are: on both the client side and the vendor side. In fact, I made a list of the 4 D’s we need from our vendors in these trying times: 1.) Decency: This means compassion and understanding, not calling us demanding immediate payments when you know we can’t pay right now…); 2.) Deliveries: Work with us so we’re not getting in everything at once at the wrong time; 3.) Discounts, especially on late shipments that we clearly can’t sell; and 4.) Depth of inventory: Now more than ever, we need our vendor partners to take some chances. I’m stunned by how many multi-billion dollar companies are not doing anything to help us.

Foley: We’re on a path to reinventing our mix; we see continued opportunity in knitwear, athleisure, luxury loungewear… We’ve narrowed our brand structure, cutting back 25-30 percent for a deeper focus on what’s selling best.

We’ve also restructured our compensation plans, for example cutting back in our tailor shop from three full-time tailors to one full-time and one part-time. We’re fortunate that our landlord continues to work with us. Bottom line: it’s all a balancing act. But we believe that with the vaccine, events (weddings, proms, graduations) will come back and there will be renewed demand for dress-up clothing.

Weil: We were lucky that we didn’t have to furlough any employees but we restructured some compensation plans in order to keep the balance sheet in line. I agree that the pandemic is a good opportunity to solidify partnerships. And timing on deliveries is critical: vendors need to respect our shipping windows; it’s 105 degrees in Dallas in July so no, we don’t need our fall goods shipped yet. The right partners respect this.

Farrington: By and large, our vendors have been pretty good. In a crisis, it’s been easier for me to ask for cooperation and compromise. They understand that we had to cut back.

Although it’s tough to predict business a year from now, I’ve read that 2021 will be the biggest year ever for weddings. So we’ll put back out the spring tailored clothing we held over. We didn’t mark it down because we couldn’t have sold it this year at any price: if we could have sold it at 30 off we would have done it; there’s no point selling it at 70 off.

So hopefully, with the return of events and our sharpened focus on sportswear, we’ll come out of this lean, mean and healthier than ever.

Giddon: I worry that the first quarter will be brutal so watch your cash. Although attitude is important, the next few months will be duck and cover…

Weil: Although I’m fiscally conservative, I believe we need some major innovations, rather than simple tweaks. We have more competition these days than we realize; our customers are spending money in new ways and in new places so we need to test new merchandising concepts. But testing means failing fast, getting in and out quickly. At the same time, we need to strengthen our involvement with our customers and our communities.

Braeger: Cash is king: we need to control inventory and expenses, and stay in close contact with our customers. What’s helped us a lot has been converting a former Hugo Boss space into a Peter Millar shop: this business has been consistently strong. We’re also looking into other ways to bring customers in more regularly: a barber shop perhaps. Or some other type of partnership…

Naymon: Our goal is to embrace change! And to consistently encourage our staff and celebrate their achievements. After all, they are our greatest assets.

Foley: Early 2021 will be tough: we’ll have fewer customers; we’ll be making less money so cash-flow is all-important. Also key: keeping up staff morale, and staying in touch with customers, even if they’re not shopping at the moment. We need to keep everyone focused on maintaining old relationships and building new ones.

Q: Is anyone focused on getting in younger customers and how are you planning to do this?

Farrington: We have to offer and edit the brands and items that keep us relevant to every generation. Our luxury product might be out of reach for young people just starting out, but our core demographic gets relatively younger as we merchants age. We can’t buy for one generation and stop there. 

That said, I think the next generational change will be the trickiest to manage. Those coming into wealth now will have a different perception of brands, consumption, sustainability, and values. The pandemic has accelerated some of the changes that were already evolving – a casual and active lifestyle for sportswear, dressing up more for occasions and less for everyday business, clothing with real performance features, authentic quality and value, an interest in the people and story behind the products…  Staying young-minded and listening to what the next generation cares about will be how we make the transition successful. 

Naymon: We’ve benefited from an influx of younger customers simply by creating an environment that welcomes a new generation. Most important is having sellers who that young demographic can relate to. Half of our selling staff is under 35 including our visual coordinator; all bring a fresh perspective to everything we do. Next on my agenda is to play the right music, to ensure our associates dress the part, and to assemble the proper vendor matrix so we’re more than their parents’ haberdashery.

Q: That can’t be easy: assembling the right vendor matrix…

Naymon: It’s not so tough! You spend time researching and seeing what’s trending in hip circles. Think APC, Stone Island, RRL, Rag & Bone, Dries Van Noten, etc. Also, I’m fortunate to have smart friends even outside my Forum circle and we speak often, sharing successes and failures. Having a wide range of people with varied perspectives helps. Having product for this younger customer allows crossover with our core clientele. It’s very cool when that happens. As a team, we sometimes look at each other and say “Who’d a thunk?”