Retailers would do well to increase AURs rather than turn.
When it comes to dress shirts, a $2.7 billion business that was down 5.4 percent for the year ending February 2013 (according to NPD stats), it’s easier than ever to differentiate the winners from the losers at retail. Observes Mitch Lechner at PVH, “This past season, the losers were those who focused on increasing turnover to drive down inventory. Whether department store or mid-tier, breadth of inventory is key.”
Clearly, in a fashion and size-specific business, faster turn can mean lost sales. According to Lechner, successful retailers focus on a broad color assortment and clear signage to communicate the new fit. “The biggest challenge in furnishings is the sea of tables. When you pile a lot of stuff on six foot tables, it all has a value of one; customers can’t differentiate good from bad. The best way to sell higher priced goods is to create clearly defined impact presentations on the selling floor.”
Smart merchants are also playing up wrinkle-free/non-iron, still a driving force in department and mid-tier stores. Says Lechner, “Performance continues to be important: retailers need not just non-iron cottons, but also stretch and blends in both classic and modern fits.”
2013 Dress Shirts at Retail
Annual volume: $2.7 billion
Average deptartment store OTD retail: $26.42
(up from $25.75, according to NPD)
Average luxury store retail range: $95 to $225
Percent blue and white solids: 40%
Percent wrinkle-free/non-iron (cottons, stretch, blends): 65%
Spring best sellers: aquatic shades, checks
Projected fall winners: deep tones, black and white, interesting collars, clean stripes, checks and prints
Tom Eckrich at Lord & Taylor, whose furnishings business is running above plan, agrees that color and fit are driving sales. “We’re just at the beginning of this color cycle: turquoise, peach, coral, berry… Also selling well: gray (a new neutral), micro-checks and plaids.” Eckrich also observes that collars continue to get smaller to accommodate skinny neckwear and slimmer fits. Spread collars are 60 percent of the business; L & T’s average OTD shirt retails are a healthy $40 to $60.
At the luxury level, most independents are narrowing assortments to a handful of key brands. At Rothmans, it’s David Donahue, Eton and Canali (with 30 to 40 percent of the business in Skip Gambert custom). In addition to a slimmer fit, Ken Giddon points out that checks (blue, purple, brights) continue to dominate.
Says Jeffrey Cohen at Sams in Livingston, N.J., “We recently added under-collar and under-cuff treatments which have created repeat business and customer loyalty; guys are also trading up to higher thread counts.” He notes that David Donahue has become a rising star based on a team that’s responsive to suggestions and works with the store on special promotions. Sams’ sweet spot in dress shirts is $135 retail; many top styles are sport shirt alternatives worn open collar. That said, they also do a nice custom business with Skip Gambert.
Paul DiFelice at Gary Waters in Canada is selling lots of hybrid/crossover models. Key brands are Eton, Etro and Circle of Gentlemen at retails from $200 to $350. At Mur-Lees on Long Island, Bruce Levitt is also selling crossover styles that work for both dress and sport (Eton, Donahue and Hugo Boss). Strong colors are lavender, pink, orange and green; elegant spread collars are key.
How slim is slim? According to Levitt, Eton shirts come in classic, contemporary and slim. Classic used to be 80 percent of the business, this year it’s 50 percent and next year he’s phasing it out, in favor of 90 percent contemporary and 10 percent slim.
At Mitchells Stores, Dan Farrington is offering a second fit in several brands (with Eton business still very strong). “Blue and white continue to dominate, followed by lavender and pink. Most of our mix is modified spread collars—we do virtually no button-downs or points.” More importantly, Farrington points out that as the lines between sport and dress shirts have blurred, he predicts a swing back to more serious shirts, a good omen for the category going forward.
Click on the image below to see the Dress Shirt Survey in detail.
Tie Trajectory: Upward! 2013 Neckwear at Retail
Annual volume: $850 million
Average department store OTD retail: $24.99 (mid-tier: $18.99)
Average luxury store OTD retail: $95
Average tie width: 3.0 to 3.25 inches
Average tie width contemporary: 2.5 to 3 inches
Percent prints (vs. wovens): 5% in 2013, 10 to 15% in 2014
Spring best sellers: brights, bow ties, pocket squares
Projected fall winners: Paisley and medallion prints, luxury silks, non-silks, bow ties and pocket squares
While it might not be a boom era for neckwear sales at retail, business is surprisingly good, driven largely by narrower shapes and accessories. “We’d been trying to slim down ties for a dozen years,” confides David Sirkin at PVH, (who estimates total neckwear sales at $850 million, up from $830 million last year). “Finally, new shapes in clothing and dress shirts became the catalyst for slimmer ties. Our business in slim ties (three inches and under) has doubled in the past 12 to 18 months.”
According to Steven Azizo at Jimmy Sales, best sellers at retail are bright colors and slightly slimmer shapes, with three and a quarter now the norm.” Says Azizo, “We dropped it an eighth inch per season for the past few seasons so in many cases, customers hardly noticed.” Another subtle change in tie business: prints are creeping up. For Azizo, they’re now 10 percent of the business; at PVH, they’re about five. (In pocket squares, however, prints rule.)
At Lord & Taylor, tie business is above plan, with solids and checks uptrending at the expense of stripes. Average out-the-door retails, says Tom Eckrich, are in the $30 to $50 range; best sellers include paisley prints from Black Brown, bow ties and pocket squares.
At the luxury level, tie business is holding. At Mitchells, Dan Farrington reports a healthy business still dominated by recognized names like Ferragamo, Hermès and Zegna. At Sams, Cohen sells lots of Italo Ferreti, Canali, and Robert Talbott, including expensive seven-fold ties. That said, he singles out Private Stock and Azizo as important margin-builders. “Both firms use gorgeous piece goods and have excellent delivery,” he observes.
At Mur-Lees, Levitt is selling more prints than wovens. Better brands outperform moderate and customers are going after finer quality, including softer, silkier fabrics from Canali and Dolce Punta. And at Gary Waters, key neckwear brands include Eton, Robert Talbott and Robert Graham at retails from $98 to $178. “We’re in a maintaining mode,” says Paul DiFelice. “Guys buy ties for events, not for every day. We’re selling narrow widths, lots of neats, and cotton/linens in spring/summer. For young guys, the go-to uniform is a self-tie bow tie worn with a cool jacket and rolled up pants.”
Indeed. According to David Katz at Randa, bow ties remain in high demand. “At the current rate of sale, Randa expects to sell more than two million bow ties in 2013. Color, shape and clean designs drive this business, with reversible bow ties coming on very strong.” (According to Katz, Countess Mara is the number one bow tie brand in the U.S.)
“As for four-in-hand ties,” Katz continues, “spring business is strong in all channels of distribution, driven by plaids, pastel solids and bonus incentives. Neckwear gifts-with-purchase that are driving sales include tie bars and pocket squares.”
At PVH, David Sirkin confirms that bow ties, pocket squares and tie bars have extended neckwear considerably. “It’s our biggest opportunity,” he maintains. “Bow ties are already six to 12 percent of the business according to store and will continue to grow as retailers devote more dollars and space to the category.”
Will neckwear sales ever get back to the glory days? (About 20-something years ago, pre-Dockers, ties were a $1.5 billion business…) “I don’t think so,” admits Sirkin. “In addition to more casual dress codes, there’s just not as much retail real estate devoted to ties. And despite growth in online selling, most guys want to touch before they buy. Neckwear is still a very tactile, and personal, purchase.”