California Apparel News

On the outskirts of downtown Los Angeles, inside a boxy warehouse of a building where bright light streams through wide windows, Arif Noor is embarking upon a new fashion adventure.

The head of Clothing For Modern Times Ltd., a retailer based in Toronto, is betting that affordable clothing is the winning ticket for retailers in an era of slumping sales and consumer caution.

On Feb. 1, Noor opened a 23,000-square-foot industrial-style loft studio, where the Canadian businessman and a small army of fashion-industry experts are designing a lifestyle brand expected to debut later this year. The brand could be the springboard for a handful of stores that Noor hopes to open in 2010.

With his new emporiums in California, Noor will dive into one of the most competitive retail markets in the world. He said he believes his strategy will give him an edge.

“The market is flooded with fast fashion,” Noor said. “Everyone can compete on price. What else are they offering the customer? Image and brand positioning is something the customer will want more than just price.”

To do this, Noor has a staff of more than 42 buyers and designers who formerly worked for such retailers as Forever 21, Bebe and Arden B. Their assignment is to shape his stores’ full collections for men and women between the ages of 16 to 32.

Noor is no stranger to Southern California. Since 1994, CMT has maintained a small office in Los Angeles. But the Canadian retailer opted to open a much larger studio because he considers the city to be the epicenter of affordable fashion-design talent. For example, one of the biggest players in affordable fashion, Forever 21, is headquartered in Los Angeles.

The 46-year-old chairman and chief executive of CMT is a longtime player in the retail world. The company, founded in 1989, operates 120 stores in Canada, 23 stores in Saudi Arabia and Dubai, and 18 stores in the United States under the nameplates Urban Behavior, Costa Blanca and Costa Blanca X. The U.S. stores are located in Boston, Chicago and Detroit.

For speed-to-market, Noor said, his store’s fashion lines can be produced in 90 days or less at his factories in Asia, Los Angeles and Canada. He said he hopes to produce clothes at the most stylish edge of the spectrum of affordable fashion. However, he also plans to offer prices near the lowest end of the market. Retail price points at his stores range from $5.80 for accessories to $150 for leather jackets.

For brand positioning, Noor points to his new lifestyle brand, SMEG, unveiled for Fall ’09. SMEG is the acronym for “Sexy, Modern, Edgy Generation.” Its products range from fashion lingerie to jeans, dresses and outerwear. One of the line’s high-end pieces will be a crinkled leather jacket with a shearling-like lining selling for $150.

Noor forecast his company will ring up sales totaling $200 million in 2009, holding even with 2008’s revenues of $200 million. About 20 percent of sales last year came from the United States.Timing is everything

Noor is making his gamble at the right time, according to retail expert Mercedes Gonzalez, president of Global Purchasing Cos., a retail consultancy based in New York. She forecast affordable fashion will increasingly become a more important part of the fashion industry.

“It’s become a staple. It’s a new category in retail,” Gonzalez said of affordable fashion.

She advises her retail clients to stock 60 percent of their boutiques with affordable fashion and 40 percent with brands. She said affordable fashion sells quickly, and it often retails below the price of many brands, even when it is marked up three times its wholesale price.

Mall owners increasingly have their eyes on affordable fashion tenants. “They are the ones expanding,” said Mark Strain, a vice president of leasing at regional mall owner Macerich Co., based in Santa Monica, Calif. Its malls in Southern California include Santa Monica Place, Los Cerritos Center and Lakewood Center.

Macerich also owns The Oaks retail center in Thousand Oaks, Calif. The mall is building out a space for up-and-coming affordable fashion chain Love Culture. Love Culture, founded in 2007 by former Forever 21 Vice President Jai Rhee, has California locations in areas such as Torrance and National City. It also runs stores in Seattle and Houston.

Other affordable fashion retailers are on the move at a time when many other fashion retailers are pulling back.

Los Angeles–based Forever 21 is scheduled to open 73 stores across the United States this year, giving the chain a total of 463 stores by the end of the year, according to Larry Meyer, one of the company’s senior vice presidents. Last year, Forever 21 opened 74 stores.

In the past month alone, it opened California locations in Salinas, Calexico, Montebello and Victorville.

This year, it will focus on debuting large-format stores that measure more than 80,000 square feet, some of them former Mervyns stores vacated by the retail chain, which declared bankruptcy last year. These big stores will offer all of Forever 21’s fashion categories, including men’s and women’s footwear. In 2010, it is scheduled to open a 90,000-square-foot flagship store in New York’s Times Square.

Another affordable fashion retailer that is expanding is Salt Lake City–based affordable fashion retailer Down East Basics. On March 17, it opened a store in Provo, Utah. It is the newest store in its fleet of more than 47 locations. It plans to open more than seven stores this year.

The off-price retailer National Stores Inc. in Gardena, Calif., whose 200 stores operate under the Fallas Paredes and Factory 2U nameplates, will be renovating its multi-level, 45,000-square-foot Fallas Paredes store in downtown Los Angeles into a flagship store.

Construction is scheduled to start by spring 2010, said Chief Executive Michael Fallas. He said he hopes it will transform the downtown store from a neighborhood retailer into a destination store highlighting the affordable fashion the company has been doing very well for years.