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U.S.
Designers Woo Sellers Abroad
Soft Market Means
Buyers May Scrimp
After New York Shows
As designers unveil their spring
collections at New York's fashion week, which begins Friday, many are scrambling
to offset anticipated cutbacks by U.S. department stores by courting overseas
retailers.
Oscar de la Renta Ltd. expects buyers
from 25 foreign stores to attend its runway show Wednesday, compared with three
or four who have made the trip in the past, says Alex Bolen, chief executive
officer of the New York fashion house. Menswear designer John Varvatos, who has
presented his line in New York for nine consecutive seasons, is skipping fashion
week entirely this season. Instead, he showed his line in Milan in June, as part
of an effort by Greensboro, N.C.-based VF Corp., which owns the label, to boost
business in Europe and Asia.
Designers Thakoon Panichgul and Derek
Lam, meanwhile, have added longer hemlines and, in the case of Mr. Lam long
sleeves, to appeal to buyers in the Middle East. Mr. Lam plans to unveil the new
styles only in his showroom, not on the runway.
The designers are responding to the
dismal state of consumer spending in the U.S., which has caused retailers to
trim orders for even designer clothes. Stores typically place orders at showroom
appointments following the shows in Manhattan's Bryant Park -- roughly four to
six months before the styles show up in stores.
But with August sales continuing to sag,
some U.S. retailers have been sending signals that they won't be buying as much
as in years past. "We're going to be very conservative" in purchasing
spring designer looks, Saks
Inc. Chief Executive Officer Stephen Sadove told investors in late August,
explaining a wobbly stock market has left wealthy Americans insecure about their
finances.
In wooing foreign retailers, designers
are taking advantage of the weak dollar. "The economy here is just so
terrible. The dollar is horrible, which makes their buying power amazing,"
says Carmen Marc Valvo, who sells $600 cocktail dresses and evening gowns that
retail for $1,500 to $3,000 at stores such as Saks Fifth Avenue. Although the
dollar has strengthened lately, he adds: "What we offer, and the price we
offer it at, makes it like candy for the Europeans." He plans to take his
spring collection to a Paris showroom for the first time, after staging his
usual runway show in New York, so he can reach out to retailers from Europe and
the Middle East.
Another thing U.S. designers have going
for them is that they deliver fresh styles more frequently than European
designers. "With the Europeans, you don't get as many drops, and having
newness on the floor all the time is great," says Laura Larbalestier, a
buyer for Selfridges & Co. in London, who has gotten more comfortable in
recent years with American style.
Designer Phillip Lim's clothes have sold
well at the British department store chain, says Ms. Larbalestier, giving her
confidence to add other U.S. designers such as Mr. Panichgul. Next week, she
plans to check out U.S. labels, including Rodarte and Erin Wasson.
Going global nevertheless can be risky
for U.S. designers, many of whom run small businesses without a lot of financial
backing. American style doesn't always translate well, and there's no guarantee
that emerging markets such as Russia or China will continue to grow. Some
designers say their European sales are already softening.
"When things weren't working in New
York in the '80s and '90s, people would say, 'well, there's a good business in
Japan,' " notes designer Vera Wang. But then the luxury market in
Japan stalled. Still, Ms. Wang began leasing a fabric warehouse outside of Hong
Kong earlier this year so she could ship more quickly to some international
accounts.
The economic slowdown is adding urgency
to the overseas push by designers. Tracy Reese, whose U.S. sales began softening
this summer, signed a London distributor last month to add customers in Italy,
Spain, Ireland and Germany. She hopes that international sales, which currently
contribute 15% of her business, will generate 25% of sales by the end of next
year.
At Oscar de la Renta, total sales are up
25% so far this year, but international sales are stronger and now account for
30% of the total, says Mr. Bolen. The company plans to open boutiques at Harrods
in London and at Saks in Mexico City later this month, along with stores in
Athens and Madrid this fall. A Moscow store is also planned.
Some small labels say they have little
choice but to go overseas. "We knew if we wanted to stay alive we had
to," says eveningwear designer Pamella DeVos, who has dressed celebrities
like Angelina Jolie in her Pamella Roland label. A number of U.S. specialty
stores that sold her line have closed, and wholesale sales in the U.S. were flat
in 2007, she says.
In response, she hit the road,
displaying her collection at a Paris showroom earlier this year. In October, she
plans a runway show and party in Dubai in conjunction with a trunk show at Saks
Fifth Avenue there. She hopes overseas sales will generate 40% of her business
by 2010, up from 25% now, and says sales so far this year are up a bit, due to
new orders from stores in Russia, Japan and France. -
2008 September 4 WALL
ST. JOURNAL
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