Forever 21 black and white spectator ‘Ollie’ oxford pumps
Just when you thought the economic outlook could not get any worse, the Dow Jones plummeted, the unemployment rate surged to an all time high rate of 5.5 percent, and the price of oil rose to a record breaking $140 a barrel. To say this is a difficult time for businesses of all kinds (particularly fashion retail), is an understatement.
And so it couldn’t have more perfect timing for “Retail’s Moment of Redefinition” (in the consumer century), last week’s Fashion Group International event which gave new meaning to the phrase, “retail therapy”. The mission of this reception, luncheon, and presentation, was to explore why merchandising for a mass consumer audience no longer works, forecast business for the remainder of the decade, to examine the ever changing shopping habits of the consumer, the effects of globalization on the market place, and the way in which the current recession is impacting on retail.
The highlight of the event was a panel discussion moderated by Joyce Greenberg, Managing Director, Financo, INC, with panelists Rick Darling, President, LI & Fung, Chris Lee, Senior Vice President, Forever 21 (which Ms. Greenberg hailed as the “king of U.S. fashion with huge global aspirations”), and Diane Hamilton, President & COO, Brooks Brothers (“THE iconic brand” according to Ms. Greenberg).
To kick things off, Robin Lewis, Vice President, Head of Retail Vertical, Vantage Marketplace LLC, delivered his “Economic Overview”. While it was dubbed ominously, "The Perfect Storm” (he explained that currently, there are three weather fronts colliding for that ‘perfect storm’: 1- Sub prime mortgage meltdown, 2-Decelerating GDP Growth, 3-Decelerating income), he was intent on injecting some lightheartedness into the sobering proceedings, seemed intent on seeing that fictional glass ‘half full’ and repeatedly sought to find some “good news” within the bad.. For example, when he was first introduced, he joked that “the good news is that I’m not an accountant” and when he quoted Alan Greenspan, who reported that there’s a “better than 50% chance" we are headed for a recession, Mr. Lewis noted that “we might avoid a technical recession”. And even if we don’t, the “good news” is that we will “finally get rid of some of the excess and reach a balance between supply and demand”.
But perhaps the key point he made is that “the consumer is in charge” and he outlined some behavioral shifts the retailer should understand (these were displayed in large letters on a monitor behind him, summarzied as ‘From’ and ‘To’). The way he sees it, the shift is ‘from’ needing stuff ‘to’ demanding experiences, ‘from’ conformity ‘to’ customization, ‘from’ plutocracy ‘to’ democracy, ‘from’ new ‘to’ new and now”. That’s where the idea of ‘fast fashion’ comes in. As he observed, “It’s a Zaro world and a Forever 21 world. It’s an Internet world, and it’s a world of new products and new services 24/7”.
He then listed 6 key points for an “Emerging New Business Mode” (1- Traditional retail is evolving to a hybrid specialty chain model, 2- There are 'mini' formats for many neighborhoods (the internet, catalogue, and other direct channels of opportunity), 3-Traditional wholesalers are integrating forward, 4- Niche branding by specialty chain brands, 5- Accelerated brand proliferation and new lifestyle cycles (continuous rapid innovation and differentiation), 6- Going global. And then he announced a "new business paradigm" which is exemplified by the fact that the “the consumer has the power of access and control and the supplier has need for access and control” .
This was a perfect segue into the panel discussion that followed. Rick Darling enumerated on four major trends which are making a difference: 1- "globalization of sourcing, 2- the economies of the world are very much in sync, 3- international retailers are entering markets they had once been afraid to enter; 4- it's all about differentiation (exclusive brands for retailers). Chris Lee proudly described Forever 21, founded in 1984, as a "fast food department store", somewhat akin to a "candy store" with "Wal-Mart prices". They made 1.3 billion last year and their goal is to "get the best merchandise as quickly as possible" and as such, they compete with H&M and Target. When asked asked by a member of the audience if there is a 'target' age group, he wisely answered that "the 21st century is about lifstyle, it's not about age." Indeed it is. My most favorite recent purchase was acquired through www.forever21.com. They are a pair of wonderfully distinctive black and white spectator ‘Ollie’ oxford pumps which are comfortable enough to really walk in since they sport a chunky 1 1/2 inch heel, never fail to illicit compliments, and cost a mere $20. Now, that's what I call ‘retail therapy’, recession or not.
As part of their expansion plans, they are building malls in South Korea and getting more into menswear (this will give the guys who shop with their girlfriends, wives, etc., something to buy.
Expansion plans also figure prominently in Brooks Brother's future. According to Diane Hamilton, it's all about "the history of a true American icon" (the company was founded in 1818 and they are celebrating their 190th anniversary). She admits the biggest challenge she is faced with is how to "redefine an iconic brand" which is known for offering a "high quality product at good value for our customers". Ms. Hamilton admitted that attempts to change it's identity in the 70's, 80's, and 90's were unsuccessful. She said the new Black Fleece Collection by Thome Browne, (a "better luxury brand") is doing well, and so are the brand's 100 regular price retail stores in the U.S. (though outlet business "continues to be strong"). In the final analysis, it's customer relationships that are "major" .Happily, their customer has "given them the go ahead to expand brands" (so expect to see men's and women's fragrances, among other things, in the future).
A New York Times Gaffe...
By the way, speaking of troubling 'times' (and in this case I mean that literally)...perhaps one can blame it on disorientation caused by the horrible state of the economy, the suffering heat wave, or the distraction of two climbers who (within two hours) ‘scaled’ the heights of The New York Times building on Friday….but still, none of the above can explain or condone the glaring typo that I found in the Evening Hours section of ‘Sunday Styles’. In the -column showing pictures from last Monday’s CFDA Awards, one guest, Mara Hutton was described as wearing a “vintage Jeffrey Beene”. We all make mistakes for sure…but how someone at the NYT did not catch this is unbelievable. I showed this to a friend who is not even involved in the fashion business, and she caught the mistake immediately. I'm sure there were a lot of red faces on Sunday morning -- and not from the heat of the day.
- Marilyn Kirschner