Blacks Retail Report

Luxury Menswear
March 2005

 

Men's Inside Track

The high end luxury men's market will continue to see moderate increases in fiscal year 2005. However, we are recommending that our clients go into the year optimistically cautious. The strength of the dollar continues to decline, interest rates are up, consumer confidence remains flat, productivity is rising and unemployment is dropping. Working with all of these indicators, we strongly believe that there is still an opportunity in the high end luxury retail market. Wealthy consumers continue to see their personal incomes rise and the growth of the stock market has considerably lifted the fortunes of investors. Let's explore what this really means for all of our colleagues and the obstacles they will inevitably face in fiscal year 2005.

Sportswear - Enough Striped Shirts

Here's what we do know: high end men's apparel trends have been in our favor for the past 20 months. We also know that the typical positive bell curve lasts about 18-24 months. The longevity of this trend will favor the high fashion oriented stores because the 'fashion junkies' will continue to push the trend. In our more traditional stores the customers have already invested in their new wardrobes by replacing old suits and stuffing their closets with striped shirts. The day is fast approaching when men will look into their closets and realize that they don't need any more striped shirts. The customers are looking for fun, new, fresh and exciting fashion influences. Our challenge as retailers is to 'fill the gap' as the striped shirt trend peaks, flattens and decreases. History tells us that inevitably there will be a resurgence in the knit business. We see a clear opportunity going into the fall season to place more dollars in knits, layering pieces and sweaters.

Our core customer is a mature man who wants to look younger. Premium denim has found its way into both fashion and traditional stores and has proven to be a real success. Men today have multiple wardrobes to fit many occasions. As high end men's stores we need to address this opportunity and explore our resources. The opportunity is real.

Clothing - 'Deals on Wheels'

In the clothing arena many of our clients have been able to negotiate better terms and consignment deals in fiscal year 2004. We know of several luxury clothing vendors that continue to offer 'deals on wheel', however managing these deals have become more difficult. These opportunities can be a great benefit to cash flow and are being used as a hedge against unit pressure as a result of price increases. However, our sales staff needs to be educated. As owners, it's our responsibility to make sure sales staff is pushing the product we own. Consignment goods can be a detriment to our profitability if 're not generating a strong turnover on the product we have capitalized.

European vs. Chinese Made Clothing

The euro is having a negative impact on our markets. European merchandise is becoming too expensive. Opening price points have grown to unsustainable levels. If the value of the euro continues to outpace the dollar, can our stores continue to pass the price increases on to our customers? We believe our customers are looking for luxury garments, but they also expect more innovation. Where's the innovation? Taking pleats out of pants does not count for innovation. We are on the forefront of major changes in sourcing. We have already seen European producers move sportswear production into China. Will clothing be next? Will we eventually be forced into buying Chinese garments that have equal quality to European producers? Stay tuned..