California Apparel News

2007 was the year that specialty retail joined the Black Friday frenzy.

In previous years, mall anchor retailers such as JCPenney kicked off the holiday season’s race to profits with campaigns of deep discounts and sales that began in the early-morning hours on the Friday after Thanksgiving. Black Friday earned its nickname as the traditional beginning of the holiday retail season—or the beginning of the season when retailers’ bottom lines shift from the negative (red) to the positive (black).

This year, shopping-center managers reported specialty boutiques opened earlier on Nov. 23, held special promotions and experimented with strategies typically wielded by the biggest retailers. It was all in the name of attracting consumer attention and dollars in a holiday season marked by a mixed forecast.

According to the New York–based International Conferenceof Shopping Centers (ICSC), consumer spending is predicted to be steady. An ICSC survey published Nov. 7 said 72 percent of shoppers would spend the same or more than they did in 2006.

According to the Washington, D.C.-based National Retail Federation, the 2007 holiday season has been forecasted to be one of the slowest since 2002. The retail trade organization said the 2007 holiday season would experience only a 4 percent sales increase over 2006 sales.

But despite the lackluster forecasts, the holiday season started with big sales on Nov. 23. According to an ICSC study released Nov. 26, combined U.S. retail sales for Black Friday and the next day—called Black Saturday—rose 7.2 percent over the same period in the previous year.

Southern California shopping-center managers also reported that the promotions by anchor retailers and specialty stores, as well as the hype attached to Black Friday, worked its magic in driving attendance. Malls were packed with shoppers during the Black Friday weekend. The number of cars filling the parking lots of South Coast Plaza in Costa Mesa, Calif., increased more than 4.37 percent compared with the 2006 Black Friday. The Glendale Galleria, based in Glendale, Calif., estimated that its Black Friday crowds tripled compared with its mall attendance on the same day in 2006.

Getting creative

However, the sometimes-gloomy forecasts and tepid economic news preceding Black Friday alarmed many retailers, including Fraser Ross, owner of high-profile specialty retailer Kitson, based in Los Angeles. “It’s not going to be an easy season,” Ross said. “You got to be creative to get people to come to the store.”

Many retailers heeded the same message. For better contemporary boutique chain M.Fredric, based in Agoura Hills, Calif., trying something new meant holding the first early-morning Black Friday sale in its 27-year history.

And according to M. Fredric co-owner Fred Levine, the promotion worked. The sale, which took place between 8 and 10 a.m. on Nov. 23, drew a 50 percent sales increase on that day compared with the retailer’s 2006 Black Friday business, which had no special promotion.

National specialty chains were also offering big promotions. New York–based Aeacute;ropostale Inc. offered a 50 percent discount on every item in its boutiques during the Black Friday weekend.

The retail environment that led to blockbuster promotions disturbed analysts such as Jeffrey Van Sinderen of B. Riley& Associates of Los Angeles. He worried that the big sales crowds will come at the expense of the merchandise’s profitability. “Sales figures were positive for Black Friday weekend, but we’re not out of the woods,” Van Sinderen warned.

Traffic tips

Mercedes Gonzalez, director of New York–based buying office Global Purchasing Cos., said she forecasts good, steady business for this year’s holiday retail season. In July, she also opened a boutique in Margaretville in upstate New York to put some of her retail theories to the test. Here are a few of her recommendations to increase retail traffic to independent boutiques:

Get the boutique involved in a charitable campaign. It builds goodwill, Gonzalez said. It also can attract customers to the store. For example, listing the boutique as a dropoff center for the Toys For Tots organization can help with spreading the word on a store. Toys For Tots typically lists drop-off centers on its Web site. She also recommended offering a 10 percent discount to those who drop off gifts.

Offer personalized services. “It’s the little things that make a difference,”she said. “It separates you from the Abercrombie[& Fitches] of the world.” Personalized services could mean offering small toys to children visiting the store, free gift-wrapping services or shipping services at the boutique. Customers often dread lugging around their heavy gifts. Shipping services also can become a revenue center for the business.

Make sure boutiques have extra sales help during the season. Long lines can make for an unpleasant shopping experience. Keep sales staff fresh with frequent breaks. Also, stay open extended hours.

Offer a competitive return policy. Also offer gift cards and lay-away plans.

If a certain item is selling well, call vendors and make immediate replacement orders for the item, asking for at least a 10 percent discount. There’s a good chance that vendors will work with the boutique if business is hot. “It’s the time of the year to hustle,” she said.

Other boutique owners have been looking for creative ways to find sales. Maggie Wachsberger, owner of the Malgosia boutique on Los Angeles’ fashionable West Third Street, said her store will offer a giftbuying service for corporate clients and other customers beginning Dec. 1.

The Aura boutique in Santa Monica, Calif., produced a holiday party on Nov. 29 with Brentwood footwear store Footcandy. Customers were offered a 10 percent discount if they purchased something at the party.

Must have: cashmere

While the 2007 holiday retail season may be marked by big promotions, it has not been marked by one “must-have” item. However, there is a must-have fabric this year. It’s cashmere. According to Gonzalez, cashmere scarves, sweaters and gloves have been selling well across the United States.

Animal prints and leather boots were reported to be selling well at the Bloomingdale’s in the Fashion Island shopping center in Newport Beach, Calif. Nina Robinson, vice president of marketing for the upscale shopping center, said she expects sales traffic to remain steady now that Black Friday has passed. “We’re saying, ’So far so good.’ We’re remaining cautiously optimistic during the holiday season,” Robinson said.

She said she expects the shopping center’s holiday sales to increase 4 percent compared with the same period in the previous year.

E-Commerce Growth Steady Before Cyber Monday

While crowds of fervent shoppers swept through boutiques looking for deals on Black Friday, their e-mail boxes were being filled up with messages promoting deals for Nov. 26, nicknamed Cyber Monday.

Black Friday, or the day after Thanksgiving, is typically the traditional start of the holiday shopping season. Cyber Monday, the day people return to their offices after the Thanksgiving holiday, is the date when Christmas shopping is supposed to start for the burgeoning e-commerce sector.

More than 72 million consumers were anticipated to shop online Nov. 26, according to a survey published Nov. 25 by Shop.org, a division of the Washington D.C.–based National Retail Federation. It’s a big jump from the 60 million people who shopped Cyber Monday in 2006.

However, some fashion e-commerce executives did not report a massive Cyber Monday sales spike. Instead they claimed a steady surge of traffic that has been increasing since late September. “Monday was not a good day,” said Mary Helen Shashy, co-owner of the Hotter Than Hollywood e-commerce store and bricks-and-mortar boutique based in Glendale, Calif.

Traffic did not jump at Hotter Than Hollywood, but traffic picked up the next day. Still, Shashy is not worried about a flat Cyber Monday. She reported that visits to her Web site have been surging since August. Traffic had doubled in November compared with visitor turnout during the same month in 2005. Shashy credited the increase in traffic to the trend of people becoming more comfortable shopping online. She anticipated traffic to spike the week before Christmas.

Cyber Monday was a good day at San Francisco–based Maneater Threads. The e-commerce site offered a 10 percent discount and a special discount for subscribers to the Web site’s newsletter. Maneater owner Tanya Zilinskas reported that traffic doubled on Cyber Monday compared with a typical Monday, often a day of ho-hum business. Like Shashy, the Maneater owner expected bigger sales in December.

“That’s when gift buying will begin in earnest,” she said.