Tailored Clothing: Suited for change

After a modest but promising uptick in sales at retail, tailored clothing is bracing for another hurdle. It’s the same issue for tailored clothing as it is for every other apparel category: rising costs. Cotton is way up, so is wool and even synthetics. And Chinese manufacturers have ceded more of their capacity to their domestic market: the middle class in China is commanding more products. Container shipping costs have gone up too. It all adds up to increases for the vendor of between 10 and 15 percent.

Who will end up paying for these increases? According to the vendors and retailers we spoke to, it’s probably going to be the consumer—but that may not be a problem.

In fact, Lanier’s Alan Rubin maintained, the typical young suit shopper in the moderate market may not mind—or even notice—the price increases. “I don’t think this is going to hurt sales,” he said. “People will be fearful, but as the economy improves, they will buy more suits.”

“I agree with that 100 percent,” said Neema Clothing’s Jeffrey Ammeen. “As a community, you can’t sell from weakness, you have to sell from strength. If you have good fashion, styling and product, you don’t have to be the cheapest game in town.”

He continued, “The suit is one product. If you had a ticket of $299 and these guys are selling it every day at $149, you can take that ticket to $329 and raise your AUR from $149 to $169. It’s twenty bucks. A suit is the one thing that can absorb a price increase. A customer isn’t going to not buy a suit because of 10 to 20 dollars.”

Ron Wurtzburger at Peerless is not so sure: “It’s not like business is soaring,” he observes. “We need to maintain prices.”

The department store retailers we spoke to admitted they weren’t willing to give up margins to absorb the increases, but Lord & Taylor’s Tom Eckrich says there are strategies to deal with it, like changing fabrics in sportcoats. Another strategy that every retailer seems to be employing to some extent: increasing private label. One department store told us that private label tailored clothing, currently at 25 percent, will rise by 5 percent in 2011.

Trends

Clearly, vendors are responding to the tastes of younger customers who see tailored clothing as fashion, not mandated work clothes. The new suit customer is in his late 20s, early 30s. He was brought up wearing tight casual apparel and low-rise jeans, and he prefers his suits trim and his trousers more like his jeans.

“We’ve gotten as casual as we can get,” said Macy’s fashion director Durand Guion. “There is a solid return to dress-up for the younger fashion customer in the less than $400 range.” And, he added, “slimmer fits are getting stronger.”

For Lord & Taylor, the best-selling suit model is slightly fitted, two-buttons, side-vented with flat front or single pleat pants.

Retailers have experimented with double-breasted suits, but no one has reported strong sales yet. Peak lapels are selling. One retailer said that three-piece suits were disappointing, and that suit separates were still hot.

Deliveries

Deliveries might be a problem for all retailers and vendors. Containers are moving more slowly from Asia. Manufacturers are favoring European companies because of the weak dollar. Some Chinese mills closed in the recession and others are at capacity and running late. Wurtzburger says, “It’s critical now to work further out—8 to 9 months instead of six or stores won’t get delivery.”

Price Increases Are Fluid

While MR was interviewing Alan Rubin, he got an e-mail about an increase in his material costs. The increases are fluid, he warned, and will remain that way for some time. “You really don’t know,” said Ammeen. “Every day we get e-mails from mills. Last week they quoted prices A, B, and C. Those prices are off the table now.”