FASHION IS NOT THE ONLY ANSWER : Beauty Is in the Eye of the Beholder

FASHION IS NOT THE ONLY ANSWER
Beauty Is in the Eye of the Beholder

By: Bruce S. Berton , July 2008

□ Consultants Corner □ News □ Consulting □ Manufacturing Clothing □

I have been reading my many past writings for publications such as Apparel On-Line, California Apparel News, Wall Street Journal, Los Angeles Times, and many other trade publications. As far as the U.S. marketplace is concerned, variables such as trade, politics, economics, war, globalization, terrorism, population growth, immigration shifts, and Mother Nature are just a few that affect the textile/apparel/accessory/footwear industries worldwide.

We only make up 5 percent of the world's population, but we have the largest economy by far.

Our retail distribution as to luxury goods is still strong. Department store growth is flat and has been for a long time. Specialty stores focused on specialized sectors are still very strong, and the box or discount stores are doing well. Each one declares that they are carrying new fashion selections for their customers. Some are increasing their fashion selection percentages, others are creating their own private label brands, and others are repackaging their core basics with new, updated fabrics to meet new lifestyles. The use of distributorships to service regional areas was eliminated in the U.S. marketplace many years ago.

At this point in time, only 55% of our apparel is imported as we have Southern California, New York State, Miami Beach, Florida and Dallas, Texas still in the apparel manufacturing business.

For your information, Southern California is larger than all others in the U.S.A. combined.

Looking back at my articles, the basic fundamentals still hold true today even more than when they were written. Competitive costs, quality of specifications, and on-time delivery are the KEY ingredients for a successful business.

Retailers have it VERY EASY. All they have to do is have the right merchandise, in the right place, in the right color, in the right size, in the right price point, for each and every customer that comes into the store. Therefore, a few economic and logistical issues come into play, such as the amount of inventories to be carried, quick response for replenishment, proper display location in the store, and making sure each and every customer is satisfied. As you can tell, I am jesting at all the expert professionalism that is required, not just by the retailer, but also many retailers
problems are passed on to you, the manufacturer, to make it all happen as planned. Fashion, no matter at what extreme or level, is just one of the many ingredients necessary to sell goods and attract new customers.

The old question of "Which came first, the chicken or the egg", is still unanswered. Fashion is one of the KEYS to excite the consumer, but allowing the consumer to purchase it at their favorite retailer is another problem. The words SALES and MARKETING enter into the matrix of how to do business profitably. You, the manufacturer in India or China, generally do not control your sales into the U.S. marketplace. I have been asked in many instances to negotiate the purchase of brand names or licenses on behalf of my offshore clients. In the majority of these requests, I advise my clients that even though they have been producing either similar product or were the private label producer of the brand, if they did not control or have knowledge of the BUYER/retailER directly (putting sales/marketing into the hands of a 3rd party sales representative), that they most likely would fail and that I would not be part of the of the set up.

Direct relationships with the management of the retailer are necessary, in addition to the relationship you must have with the IMPORTER who is selling to the retailer. Your success in selling your fashions or doing private label is not via email or websites, but directly with the owners and their department heads.

Just sitting in your facility and waiting for your agent or sales representative to send you a customer or request a costing is not the way to capture the business and have steady growth.

True, it costs more up front, but eye-to-eye relationships tend to be the difference between getting a profitable order or just being on the list for the lowest price.

Bruce S. Berton is a business and management consultant with Stonefield Josephson, Inc., a leading regional consulting and accounting firm with offices in Santa Monica, San Francisco, Walnut Creek and Mexico City. The information in this column is of a general nature. Readers inquiries are welcome; and may be sent to Bruce Berton, at Stonefield Josephson, Inc., 2049 Century Park East Suite 400 Los Angeles, California 90067 310-432-7437 Direct
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Hong Kong, or send an e-mail to: bberton@sjaccounting.com