GLG News by Women's Apparel Experts: Retail Consultants

Martin BrillManaging PartnerSweetwater Consulting LLC

Abercombie & Fitch Apparel Is A Natural Fit For Europe

July 18, 2007

Analysis of:A&F sets sights on Europe | www.retailingtoday.com

The Abercrombie & Fitch brand is percieved as edgy, sexy and contemporary American fashion, making it a perfect candidate for European expansion. The company is growing its top line by inceasing square footage in the U. S. as comp store sales have been generally flat. The London store concept was based on the unique New york flagship store on fifth avenue and will be the model for the new stores throughout Europe.

Martin BrillManaging PartnerSweetwater Consulting LLC

Undeterred by Foul Weather and the Economy, Guess Continues Spectacular Growth

June 11, 2007

Analysis of:Guess Steps on the Gas: Overseas Drive Helps Company's Growth Soar | www.wwd.com

With almost flawless execution of their global retail strategy and powerful brand extensions, Guess continues its dramatic growth in revenue and profit. Offering no excuses about the weather, high gasoline prices and a soft housing market, Guess reported that U.S. same-store sales for their first quarter grew 13.6 percent awhile total company earnings increased 71.9 percent. Wholesale revenues at Guess grew 77 percent, in spite of the brands rapid expansion of their own retail stores and growing Internet business. The experienced and talented upper management of the company was able to change the business model from a wholesale department store resource to a leading global retail brand in six years. Guess is established as a fashion leader in the “contemporary” fashion segment and its well merchandised product assortments uniquely position the brand for further global expansion.

Martin BrillManaging PartnerSweetwater Consulting LLC

My Space and You Tube Are Changing the Way Young Apparel Brands Get Hot

May 30, 2007

Analysis of:Talking to a Generation: Brands Turn to You Tube To Spead the Message | www.wwd.com

Considered to be still in its infancy, You Tube and My Space are growing geometrically, with 267 million viewers combined in March 07’, verses 71 million last year. Freedom of expression, with humor as a trigger, is creating viral marketing phenomena in the world of fashion. Major brands such as Nike and Gap are creating content, specifically, to engage an audience to promote new products. Fashion marketers are experimenting with 10 second TV spots to drive targeted segments to these sites to view their content.

Martin BrillManaging PartnerSweetwater Consulting LLC

Apparel Industry Trends Are Creating A Perfect Storm

April 16, 2007

Analysis of:Wholesale Giants Morphing Into Retailers | www.wwd.com

• Recent retail consolidation (such as Federated’s acquisition of the May Company) has compelled apparel wholesalers to accelerate development of direct to consumer strategies in order to gain greater control of their distribution channel.
• Wholesalers are on the lookout to acquire companies with the potential to develop into global retail “lifestyle” brands.
• Properly executed retail concepts have the effect of strengthening the brands wholesale business.
• As wholesalers direct to consumer business grows (Liz Claiborne is projecting to 40%) it will create a fundamental change in financial planning.

Martin BrillManaging PartnerSweetwater Consulting LLC

Not Ready To Cash Out: The Gap Begins Its Search For A New CEO

February 14, 2007

Analysis of:Top Designer Exits Gap | www.wwd.com

Industry speculation, fueled by CNBC, that Goldman Sachs was hired by Gap Inc. to “help explore options” was denied last week by the company’s founder and Chairman Emeritus, Donald Fisher. When contacted about Mr. Fisher’s comments, the investment banking firm declined comment.

Following the resignation of Paul Pressler last month, (who succeeded Mickey Drexler as CEO four and a half years ago) the company accepted the resignation of Gap President Cynthia Harris and replaced her with Marka Hansen who enjoyed moderate success as President of the company’s Banana Republic division.

Last week, Charlotte Neuville, who was hired a year and a half ago as the Gap’s Head Designer, abruptly left the company and a search is on for her successor.

The difficult task ahead for the company is to find a top-tier CEO who would be disposed to initiate yet another a turnaround effort in the glare of impatient investors’ scrutiny and be willing to embrace the freshly minted executive team now running the companies’ three major operating divisions. (Gap recently hired Dawn Robertson to turn the floundering Old Navy around and Banana is now being run by interim President, Jack Calhoun, who worked for Hanson as Banana’s Chief Merchant.)

 

Martin BrillManaging PartnerSweetwater Consulting LLC

Jones Strategic Plan Fails To Overcome The Impact OfRetail Consolidation

October 30, 2006

Analysis of:Jones Apparel Loses Ground | www.globest.com

After failing to sell the company a few months ago, Peter Boneparth, CEO of the Jones Apparel Group, is moving forward with his “strategic plan” to cut costs, streamline pre-production operations and sourcing, strengthen the company’s wholesale brands and increase the retail presence of their retail stores which includes Barney’s.

In spite of these internal initiatives skeptical investors are wondering whether the company, can shake off the impact of Federated’s acquisition of the May Company and the severe loss of $12.3 million of operating profit from the Polo Jeans Company, (which was sold back to Polo Ralph Lauren).

Martin BrillManaging PartnerSweetwater Consulting LLC

Fierce Competition In Europe Is Changing U.S. Apparel Retailing

October 26, 2006

Analysis of:Retail Market Feels Fast Fashion Effect | www.wwd.com

European “fast-fashion” specialty retailers are increasing their presence in the U.S. and putting increased pressure on American specialty chains that cater to fashion conscious young women, to speedup deliveries of trendy apparel at affordable prices.

The highly sophisticated sourcing platforms developed by a number of European apparel chains are engineered to bring fresh fashion assortments to their stores on a weekly basis, which drive stock turns, increase market share and build store traffic.

Specialty retailers in the U.S., especially those targeting women under 30, are speeding up their supply chains by developing infrastructures and work-flow process’s that emulate European apparel chains such as Mango, H&M and Topshop.

Department stores and mass merchants are reacting to these changes in the competitive landscape by pressuring their apparel suppliers and direct sources to increase the regular flow new fashion assortments to the sales floor.

Martin BrillManaging PartnerSweetwater Consulting LLC

Liz Claiborne Reaches Outside The Industry For New CEO

October 23, 2006

Analysis of:Life After Charron: Liz Faces An Uncertain Future | www.wwd.com

William L. McComb – a Johnson and Johnson group chairman, with no apparel manufacturing, or retail experience – will succeed Paul Charron as Liz Claiborne’s new chief executive officer next month.

In an earnings slump for the past year and a half and operating in a very tough retail environment, the multi-brand apparel giant’s new boss will be facing a very steep learning curve.

Trudy Sullivan, the Liz’s highly regarded president, was in the running for the job, but was passed over; leading to speculation that she will soon leave the company.

This year, four top executives have left the company and if Sullivan leaves, McComb will have to count on a weakened executive staff and Paul Charron, (who will consult for one year) to get him up to speed on the intricacies of global manufacturing, and apparel specialty retailing.

With a dearth of top executive talent available within the industry, look for more executives with a background in consumer product’s or corporate finance to ascend to the CEO spot at a number of major apparel companies in the coming year.

Martin BrillManaging PartnerSweetwater Consulting LLC

The Biggest Trend In the Apparel Industry? Private Label Brands

September 26, 2006

Analysis of:JCP unveils intimate apparel boutiques | www.retailingtoday.com

• JC Penney’s creation of its latest private label brand of intimate apparel, Ambrielle, is emblematic of the most significant trend in apparel retailing.

• In their concerted attempt to promote exclusivity and drive margins, department stores and mass merchants are devoting more floor space to private labels, at the expense of major multi-brand manufactures.

• Earlier this year, Wal-Mart significantly cut the size of its orders on Levi’s Signature brand, to free up “open to buy” dollars for its own private labels.

• Major apparel makers acknowledge that the trend of direct sourcing by their biggest accounts is accelerating at a rapid pace.

• Multi-brand apparel makers like Liz Claiborne and the Jones Apparel Group are countering the private label trend by selling directly to consumers by way of their specialty retail stores and online sales platforms.

• Apparel manufacturers distributing more than 25% of their production to any one retailer are in serious jeopardy of significant hits to their top and bottom line’s – without warning.

Martin BrillManaging PartnerSweetwater Consulting LLC

Luxury Apparel/Accessory Brands Contiue Dramatic Growth

September 12, 2006

Analysis of:PPR's Stellar 1st Half: Gucci Group Propels 27% Surge in Profits | www.wwd.com

• Negative macro-economic factors have had little impact on the leading global luxury brands
• Top European and American luxury brands continue to deliver dramatic sales and earnings growth.
• Gucci and Louis Vuitton remain the star performer’s in the “upper luxury” segment
• Coach's earnings rose 33% for the quarter confirming the strength of their  “affordable luxury” brand positioning.

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