Black Blog

Catch Steve On CNBC's Power Lunch Monday!

Blacks Senior Consultant and Founder Steve Pruitt will be appearing on CNBC's Power Lunch program Monday, Dec. 22.

Steve will be talking about holiday sales, retailers' markdown strategies and much more.

Catch him at 9:15am PT/12:15 pm ET on your local CNBC station!

An In The Black Friday

Thanksgiving weekend ended on a positive note after a Black Friday sales spike put a little more revenue into retail coffers. Merchants in cities such as Boston and Manhattan were able to feed customers’ continued desire for trend and lux product by offering discounts of up to 70%.

Indeed, the slowing demand for full-priced luxury product was evident in the extent of retailers’ markdowns. Saks Fifth Avenue was showing Zegna at 50% off while Barney’s marked Lanvin dresses down by a third. The reduced demand has left fashion insiders wondering just what kind of products and promotions it will take to keep customers shopping.

There is a bright spot and that is that well-heeled shoppers still need and desire luxury product for the holidays and New Year and they could clear out the reduced amount of full-priced inventory. If that happens, 2009 could begin on a brighter note.

Paris Review: Spring '09 Runway Shows

The Spring ’09 runway shows took Paris by storm last week, showing some of the best fashions we’ve seen for the season so far. This says a lot, given the overall high quality of merchandise that designers have been producing lately. Both the New York and Milan shows were impressive, but Paris took the prize. Here’s a rundown of our favorite shows, and their trends:

Balenciaga:

• Futuristic, sci-fi influence
• Use of paper-thin metallic apparel and accessories.
• Pale and crinkled fabrics mixed in with A-line structures and symmetric cuts

Balmain:

• ‘80s and rocker chic – a classic sexy Balmain attitude
• Crystallized and acid-ripped details mixed with a fresh shoulder and skinny cuts

Dries Van Noten:

• Inspired by “bold Russian paintings”
• Sportswear, creating a more wearable collection
• Modernist and graphic styles
• Optical illusions using black and white - boxes, grids and graphs
• Layering Prints
• Box prints
• Big, silver bauble necklaces

Mui Mui:

• Urban decay
• ‘80s- graffiti mix with Japanese details and pleating
• Distressed fabrics dotted with fraying holes
• Burlap and satin fabric
• Roman mosaic prints – classical references
• Old school art meets modern

Stella McCartney:

• Jumpsuits and functional wear
• Crochet, knits layers, sequins
• Blushes, pink, light blues
• Spring lace, simplicity, and plunging necklines
• Easy-to-wear realistic pieces

Yohji Yamamoto:

• Yohji at his coolest. Simple, master-tailored pieces
• Black and white boyish suits and slouchy paints
• Frayed and homespun feel
• Navy, black, and print strapless gowns

Yves Saint Laurent:

• East meets West theme. Asian-modernist mix came out in the towering lacquered chignons and soft, cocooning shapes that were derived from kimono wrapping
• Japanese fishermen's pants and Japanese austerity
• Kimono Wrapping, Bows, silk jackets.
• New shoes–latticework grids of leather with metal-mesh heels

New York Retail & Consumer Outlook

Across the U.S., retailers and consumers alike have been feeling the strain from recent financial crises. However, in Manhattan we are still seeing a positive outlook from consumers thanks to the incredibly strong fall merchandise and stores operating at their peak performance. Confident New Yorkers and tourists, still streaming in on the strength of the euro, are keeping stores busy with a consistent flow of traffic.

Even though some high-end stores like Comme De Garçons have seen a decrease in new customers, regular customers can’t help but buy this season. The merchandise design is spot-on and want is taking place over need in luxury apparel.

Key fall items such as boots, lace, and leather have excited consumers. Revved-up sales teams have also allowed Manhattan retailers to really engage their customers. Take, for example, Phillip Lim downtown, which offered every customer – buying or not – a beverage of their choice. Small, reassuring gestures like these allow consumers to feel comfortable with cautious spending for fall.

During trying times like these, it’s important for the retailer and the consumer to connect and for the consumer to feel that there are some bright spots on the horizon.

NY Fashion Week: Luca Luca's Space Age Appeal

Luca Luca brought a flock of industry elite and celebrity customers under the tent Monday to see its futuristic design concept for S/S ‘09. Since its inception, Luca Luca has created a wide variety of product for sophisticated clientele for whom money is no object. Its S/S collection feeds off of the brand’s chic variety but offers a more sportswear driven emphasis.

The line was stark, structured, and concentrated on a white pallet – the perfect setting for designer Melgoza’s architectural and modern inspirations. Slight vents, panels and slits gave contrast to each look on the runway but made the pieces seem less functional when compared to previous seasons. Many of the cocktail dresses offered the illusion that they were made of more than one piece, and there was not a single embellishment in sight.

Is this the beginning of a new space age era for some leading designers? And if so, will consumers buy it? I will watch to see if this trend continues as I analyze at the shows throughout the rest of New York fashion week.

New York Gears Up For Fashion Week

Fashion Week is sweeping New York again with parties, runway shows and hobnobbing. Festivities have already begun but the onslaught of Spring ’09 runway shows start Monday.

Among the most anticipated shows are Zac Posen, Marc Jacobs, Phillip Lim and Calvin Klein, which is celebrating its 40th anniversary as a top brand.

Blacks will continue to send reports as the shows begin, highlighting the best in designers and fashions.

Fall Trends: Women's Ready-To-Wear

Fall designer merchandise has landed, and the trends are in. Blacks's New York Merchandising Analyst Ashley Pruitt takes a look at the top trends for women’s ready-to-wear this season:

1) Dark Chic
This look is one of our favorites. It’s dominated by black, after all. We’re also seeing modern materials and a contrast in fabrics, with a mix of dark glamour and sharp edges. Accessories include spiked heels, clutches, and studs.

This season’s dark chic also entails “grown up dressing” with a rocker kick; this includes fitted sophisticated dresses and furs matched with boots and dark reflections. Designers include Balenciaga, Todd Lynn, Fendi, Dries van Noten, and Viktor & Rolf.

2) Stilettos
High heels are more than an accessory this season – they are part of a whole attitude and look. We’re seeing metals, pointy toes and shapes. Designers include Stella McCartney, Sergio Rossi, and Christian Louboutin.

3) Shapes and Skinny vs. Volume in product
This play in contrasts is being executed with volume trousers, boots, extra sexy shoulders or fabric at the hips. We’re also seeing high-waisted trousers and skinny ski pants.

In the volume category, designers are showing puffed-up dresses and puffas for jackets. This product is beautifully done in luxe fabrics. Designers include Marni, YSL, Bottega Veneta, Louis Vuitton, and Givenchy.

Quick Trend List:
Long and narrow looks - include slinky fabrics, floor-length dresses, and long skirts.

Plaid - Chic shapes and oversized checks. More elegant tartans are also in the picture – just look at Ralph Lauren or Dolce & Gabbana for an example. Other designers include Balmain and Carolina Hererra.

Lace – It’s a traditional fabric that has been given a modern makeover. Heavy lace is a larger statement; this fabric is done well with a short boot. Designers include Prada, Givency, and Derek Lam.

Hoods - Designers include: Marc Jacobs, Fendi, and Giles.

Gothic Victorian look - High colors, embellishment, dramatic textures. Designers include Alexander McQueen, Etro, and Givenchy.

Bows - Oversized bows on dresses, and jackets. Designers include Valentino, Asprey, and Jil Sander.

Sequins - Metallics turned for a touch of hard cool. Seen on evening jackets, cover-ups and dresses. Designers include Preen and Miu Miu.

Boho Chic - Glam affair with a 70’s edge. Seen in prints, scarves and slouchy bags. Designers include Gucci, Ralph Lauren.

Fall Palette:
-Fall orange/auburn
-Ink
-Grey
-Black
-Neo

Steve Pruitt Becomes MR Magazine "Expert"

Blacks Senior Consultant Steve Pruitt is the new Merchandise Planning & Strategy Expert on MR magazine’s MRketplace.com. You can ask Steve a question and read his responses by going here.

With over 30 years of experience in the industry, Steve is the go-to guy for expert advice on apparel merchandising and general business consulting. Retailers, if you have questions, we encourage you to contact Steve at steve@blksretail.com or through his column on MRketplace.

Blacks Attends Spring ’09 Menswear Shows

Menswear buyers flocked to New York for Project and The Collective earlier this month. We were there too and here’s what we saw: saturated colors, a resurgence in shorts, and lots of new spring jackets. Outerwear is overtaking the soft jacket trend of the last several seasons.

It’s unlikely that stores will be as bright as the shows, but we do expect a more colorful spring next year.

Overall, retailers came away excited about the new merchandise, even though prices on European goods continue to rise.

Analyst Perspective: Coping With Price Increases

The climbing costs of petroleum and Chinese production will result in higher prices for Outdoor merchandise in spring 2009. I'm predicting a 10%-15% rise across most classes, so the question is: What as merchants should we be doing about this?

At this point everyone is aware of the ripple effect of petroleum increases, but few realize that vendors' sewing contracts with Chinese manufacturers are about to expire. When these contracts are renegotiated, they are guaranteed to specify a higher rate for their work, which will then be factored into the price of the goods they produce.

Unfortunately, buying merchandise closer to need is not the answer since vendors will be cautious about controlling their upfront production in the face of higher costs, making in-season merchandise scarcer.

This means that retailers need to have a clear understanding of how much they need to land on a month-to-month basis 12 months in advance. More than even before, Outdoor merchants now need to be forecasters. They need to be open to new planning methods that can clarify the 'crystal ball'.

Understanding how to land up-front purchases closer to demand will be key. The close-out pipeline will become much less reliable than in previous years.

Some of your customers will support the price rises while some will not. To keep customers you will need to make sure your floor looks fresh every month by placing deliveries in a timely manner. You also need to energize your mix by seeking out new vendors and categories (See my March 17th blog, “Mixing It Up”).

These price and production issues will probably also lead to a shortage in must-have items so you will have to adapt to this changing environment as well. My answer: play to your strengths. Advertise the must-have classifications and if a customer comes in and the key items are sold out, make sure they walk away with something they not have planned on buying. We need to drive more traffic to off-set any customers that put on the brakes
when they see increased prices.

These adjustments take some planning but can be done in a profitable way, and they are absolutely necessary if you are going to survive and prosper in this new retail climate.

And, if you have any questions about how to make these changes and how to forecast 12 months out you can always give me a call.

Analyst Perspective: Grab Share From Surf, Street

Several Outdoor retailers have asked me if Surf and Streetwear product can sell beside their cornerstone brands. In my opinion, all Outdoor Operations need to be asking themselves this question.

It's a never-ending quest to evolve our identity and drive more traffic, and many of the Surf/Streetwear lines are a nice complement to the sportswear lines we carry today. Most importantly, these collections add another dimension to our business without taking away from our core categories.

It simply adds annual rate to a fun, new exciting business. Many of our customers intersect both of these business models, so why not embrace the opportunity?

Here are a few observations:

- A large segment of the 'Outdoor' customer base is wearing fashion items (t-shirts, sneakers and denim with some surf and skate influence).

- Online Outdoor heavyweight Moosejaw is representing a Street mix as well as Surf. They have moved from core brands into lesser known labels. In addition, these labels are now taking up valuable e-commerce space. These are both clear signs of success.

- The customer wants more options and there's a lot of product availability.

-The core Surf, Skate and Street brands have moved into lifestyle brands. In addition, several key vendors have moved into lifestyle brands for the 35-55 age groups, such as Quicksilver Edition.

- There's potential for slightly higher margin opportunities in Surf/Street. In addition, the initial commitments to test these lines are not very high.

-Reorders and chasing product 'closer to need' is a cash flow opportunity. Product seems to be readily available in this market.

I know several retailers who have added these categories and had some early success. Surf is probably the best category to start with since the surf lines of old have abandoned their core surf strategy. They now consider themselves to be lifestyle brands and as a result they complement the mix of product that we already have in our stores.

Merchants who have dipped their toes in this market usually start with the Quicksilver, Billabong and Hurley lines and then expand into lesser-known brands. But remember, you have to be committed if you are going to successfully enter this market. The new lines need to be presented front and center. I also recommend a separate planning category for Surf to truly understand what the opportunity presents.

If you do well in the Surf category the next step is to extend into Streetwear. Plan these tests into your Sportswear OTB's. A small dollar risk could lead to a great opportunity.

If you aren't in either of these categories yet, test the waters and let me know how you do. I'm betting that there's an opportunity to grab some market share.

Analyst Perspective: Mixing It Up

Dominant vendors have made life simple in that margins and sell-thru rates are reasonably predictable. But are these key vendors doing enough to keep the customers coming back? In a lot of cases, I’m not sure. Each season the mix is predictable, from vendors to colors. Innovation, such as eco-friendly, has been on the rise, but not enough to drive new traffic and excitement. Remember, increases in turnover rates are a result of customers returning more frequently and it doesn’t seem that the big box stores are giving customers good reasons to come back.

Every month and every season the mix needs to change enough to encourage more visits. If the store is consistently being refreshed it will drive a subconscious but ‘real’ concern in customers’ minds that the product won’t be available next month -- buy it or lose it! This drives sale. Right now, the Outdoor business is too predictable; there’s little sense of urgency for customers to buy now. The same product will be available in the same color for the next three months.

Maybe it’s time to mix things up, even if it means entering new markets (assuming they fit with your customer base.)

Let me give you an example. I recently spoke with a merchant who runs a successful high fashion men’s and women’s denim operation in Mississippi. You know this kind of store: it carries $200 jeans, $125 tops and $400 dresses. This merchant was shopping the Outdoor markets for products that would differentiate his operation. It seemed an obvious choice to him since a lot of the customers buying designer product are also wearing Outdoor brands like North Face and Patagonia. In fact, that very day I was wearing Diesel Jeans, Cole Haan shoes, a North Face breaker and an admittedly goofy striped sports shirt that cost me $135 (I have no idea why I own such an ugly shirt that cost that much money but now feel obligated to wear it). The point is, I understand and shop both these markets – better men’s and outdoors.

This merchant knew that he could benefit by catering to the various wants of the same customer and Outdoor stores can do the same. In fact, Outdoor stores are missing a clear opportunity by forgetting some of their “boutique” roots.

Of course the surf business can be a contributor, and no, I’m not necessarily recommending Diesel Jeans. I’m recommending brands that are distinct to you in your local competitive markets: sportswear brands, margin brands, fashion tees, sports shirts, street shoes, collections, etc. We need to look for brands in our price range that contribute to the boutique model, throw off higher margins and deliver fresh excitement. Similar to my friend in Mississippi, the Outdoor Stores need to visit other markets. For example, the Magic Show in Vegas offers countless opportunities. The brands and vision are endless and Outdoor retailers need to take more advantage of the variety.

Analyst Perspective: Men's vs. Women's Cycles

When it comes to the difference between female and male shoppers the trends are clear: women are more likely to have a preseason buying plan for cold weather products and new seasonal goods. Retailers need to take advantage of this trend by focusing their first seasonal shipments on women’s wear. In other words, get the women’s product on the floor and in the most visible of spots first.

As shoppers, men can be tire-kickers and grazers. They will wait until they’re freezing before they invest in a jacket. If you focus your merchandise on women's wear at the beginning of the season, your sales will increase, but remember that the window is small and the men’s visibility needs to be aggressive for the remainder of the season.

The markdown (MD) cycle also plays into these gender trends. For example, men will act on a 20% MD in January, whereas women will need an MD of 30% to 40% to act. This is because women perceive the season as being longer. After all, they were buying in August and September when the men were still grazing.

The lesson here: pay attention to your gender trends and be more aggressive with Women’s MDs. It takes more margin sacrifice to move product.