After getting women hooked on fancy handbags and expensive shoes in recent years, retailers are trying to rekindle a love affair with clothes.
U.S. department stores are leading the charge, with Saks Inc., Nordstrom Inc. and Macy’s Inc. improving in-house clothing lines and refurbishing women’s departments.
The retailers are counting on women to spend more overall and not simply shift their dollars away from higher-margin purses and footwear, said Liz Dunn, a New York-based analyst with Macquarie Group, an Australian investment firm.
“Retailers are trying to give women more reasons to buy clothes,” said Candace Corlett, the president of WSL Strategic Retail in New York. “In the late 1990s and early 2000s, people were scooping up lots of stuff so you now could say, ‘How many pairs of black pants do I need?’”
While handbags can be marginally more profitable because retailers discount them less, department stores are pushing women’s apparel because it draws traffic and is purchased more frequently, said Steven Dennis, founder of SageBerry Consulting LLC, a Dallas-based luxury consulting firm.
Besides, women spend far more on clothes than accessories, Corlett said. Women’s apparel sales amounted to $108 billion in the 12 months ended in September, according to NPD Group Inc. Women bought $22.5 billion of footwear and $5.7 billion of handbags, the Port Washington, New York-based firm said.
Overcoming an accessories obsession that has been going strong since the late 1990s won’t be easy, Corlett said. In many cases, bags and shoes outshine apparel with innovative uses of materials and pure panache. Hot sellers include a Gucci python bag for $4,700 and Christian Louboutin red-soled platform pumps for $795.
During and after the recession, many women were looking to refresh their look without buying entire outfits, according to Dunn and Corlett. Bags and shoes also can be worn on more occasions and from season to season, they said. Even though the jobs situation has improved recently, post-recession female shoppers remain value-oriented, Dunn said, which makes the stores’ new strategy challenging.
Saks has refurbished the mid-priced fourth floor of its Manhattan store under a “Wear Now” banner touting the clothes’ current look. The space houses 15 connected designer shops, featuring brands including Tory Burch, Ralph Lauren Blue Label, and M Missoni. The New York-based chain also extended its Saks Fifth Avenue Collection, taking it beyond simple separates like cashmere sweaters to include such fashions as three-color striped rabbit fur vests and cropped, black shearling jackets.
Sales have outperformed old-style departments at other locations, said Saks Chief Executive Officer Stephen Sadove on a Nov. 15 conference call with analysts.
Nordstrom, the Seattle-based chain of 117 department stores, has been testing a refurbished women’s department in nine stores, said Colin Johnson, a spokesman. It combined multiple, narrowly defined women’s apparel areas -- which had such names as “Individualist” and “Savvy” -- into three main departments called “Trendy,” with its “edgier” fashion, “Modern” with contemporary clothes and denim, and “Updated Traditional,” with suits and separates, Johnson said. The idea is to make the store easier to navigate.
In the spring, Cincinnati-based Macy’s is rolling out a remade version of its private-label Charter Club line centered on a handful of “modern classic” pieces that are the foundation of its customer’s wardrobe: the blazer, the tunic, georgette blouse, cardigan, printed skirt, pants and trench coat, said Jim Sluzewski, a spokesman for the retailer.
Face the Mirror
Changing shopping behavior won’t be easy because women are used to scanning the handbag aisle and seeing something they don’t have in the closet, Corlett said. Also “you don’t have to face the mirror to buy it,” she said.
Casual traditional women’s clothing was one of the two weakest categories last quarter at Macy’s. At New York-based Saks, women’s apparel generates 37.5 percent of revenue, slightly lower than it was five years earlier. Women’s shoes account for 12.8 percent. In the year ended in January 2006, all shoes came to 8.5 percent. A similar story has played out at Neiman Marcus Group Inc., according to regulatory filings from the closely held Dallas-based retailer.
Last month, Saks already was offering deep discounts in its new “Wear Now” department. The rabbit fur vests were nearly 60 percent off the original $995 price as was the black shearling jacket, down to about $922.
The chains will have to take chances, according to Dunn.
“Retailers are hesitant to take too much risk on fashion buys, and they need to, to get women excited about fashion again,” she said.