<\/p>\n
\n\tA week ago, retail veteran Adrienne Lazarus visited Aritzia in The Westchester mall in White Plains, N.Y., and was bowled over by what she saw.<\/p>\n
\n\t\u201cAritzia is killing it,\u201d said Lazarus, who has been president or chief executive officer at Madewell, Intermix Ann Taylor, Frye and Bandier. \u201cIt\u2019s all elevated, tailored, refined clothes for work and going out \u2014 beautiful coats, luxe sweaters, cashmere cardigans, beautiful blouses, skirts and trousers. It\u2019s so put together. And upstairs I saw the best casualwear and puffers, for work and the weekend.\u201d<\/p>\n
\n\tThis year, Aritzia is leading a pack of fashion specialty retailers with outstanding financial results including Ralph Lauren, Aerie, Urban Outfitters, Gap brand, Coach, Toteme and Fast Retailing. They\u2019re all generating double-digit sales gains, which is rare in retail and particularly noteworthy now considering the widespread macroeconomic uncertainty and the consumer strain caused by rising food, gas, housing and health costs.<\/p>\n
\t\t\t\t\tAerie\u2019s easy appeal.<\/p>\n
\t\t\t\t\t\t\t\t\tCourtesy of Aerie<\/p>\n
\n\t\u201cThree things are driving this phenomena,\u201d said William Susman, head of the consumer and retail practices at Cascadia Capital. \u201cFirst, never underestimate the American consumer\u2019s desire for more stuff. Second, these brands in particular are finding the right balance between offering high-quality and perceived relative value. The consumer is not stupid. She wants what she wants and wants to pay a fair price. Third, retail is detail. The leaders of these organizations are executing really well with basic blocking and tackling.\u201d<\/p>\n
\n\tCraig Johnson, president of the Customer Growth Partners research and consulting firm, said: \u201cConsumer spending is solid, not great. But if you look at the specialty apparel market, it tends to be the upper-market players that are performing. It\u2019s those [retailers] that focus on value and newness and an almost \u2018casual elegance.\u2019 They\u2019re finding the white space, where there\u2019s organic demand in the market.<\/p>\n
\n\t\u201cMuch of retail is going sideways, but these specialty brands are doing quite well and providing newness,\u201d Johnson said. \u201cIt\u2019s all in the product and it\u2019s about attracting higher-income individuals, not necessarily the top decile and executing with front-end excellence. You want to have geographic expansion and an expanding brand concept.\u201d<\/p>\n
\n\tJennifer Foyle, president and executive creative director of Aerie and American Eagle, said: \u201cI love building our own brands within our portfolio. It\u2019s hard. It\u2019s very different. Not everyone approaches business that way,\u201d speaking at the Wharton Baker Retailing Center CEO Summit in Manhattan this month. \u201cYou see a lot of collaborations out there. I\u2019m more in the business of trying to create [more of] our own business within a wonderful portfolio of brands. I think we\u2019ve only just started. Sometimes you stand out by doing what your competition is not doing. That\u2019s how Aerie has won and that\u2019s how we are relevant today.<\/p>\n
\n\t\u201cI\u2019m constantly focused on where is that next white space,\u201d she said.<\/p>\n
\n\tLast quarter, Aerie\u2019s sales rose 25 percent. Ditto for Coach. Ralph Lauren rose 17 percent. Urban Outfitters gained 13.7 percent. Gap brand was up 10 percent. <\/p>\n
\n\tReal standout performances came from Aritzia, up a whopping 44.1 percent in its second quarter and the Fast Retailing-owned Uniqlo, which was up by 34.6 percent in North America during its latest fiscal year, ended Aug. 31. (Overall, Fast Retailing saw a 16.6 percent annual gain).<\/p>\n
\n\tExecutives from many of these retailers have indicated that the sales momentum seen in the second quarter has continued into the third quarter, and should extend into fourth-quarter holiday selling.<\/p>\n
\n\tStill, for many other specialty fashion brands, gains have been elusive. Lululemon, J.Crew, Nike, Athleta and Old Navy have been underperforming lately. And in the down-and-out category, Allbirds closed all of its stores and Francesca\u2019s liquidated.<\/p>\n
\t\t\t\t\tFrom the Polo Ralph Lauren spring 2027 ready-to-wear collection.<\/p>\n
\t\t\t\t\t\t\t\t\tCourtesy of Polo Ralph Lauren<\/p>\n
\n\t\u201cThe brands winning are those being the truest version of themselves,\u201d said Lazarus. \u201cPeople want Polo to be Polo. Levi\u2019s to be Levi\u2019s. It\u2019s all about understanding what your brand means to their customers, why it exists and really amplifying the brand DNA. Gap is being Gap again, but they\u2019re ensuring that the brand evolves. Aritzia really knows the customer and stays close to the customer.\u201d <\/p>\n
\n\tAt Aritzia in The Westchester Mall, the brand\u2019s multigenerational appeal was obvious. \u201cThe store was packed with every age,\u201d said Lazarus.<\/p>\n
\n\tFoyle stressed the same notion. <\/p>\n
\n\t\u201cWe go back to our core to make sure we\u2019re always thinking about that and wardrobing her\u201d that way, she said. \u201cTrends are happening so fast. We just have to be getting in front of it and seeing where we think that customer is going next. But stay with your product.\u201d<\/p>\n
\n\tLazarus sees \u201cluxury trade down\u201d as a common thread through specialty retail. It could be tagged as \u201cquiet luxury,\u201d or in the case of Aritzia, \u201ceveryday luxury\u201d is the mantra. Coach has long been associated with \u201caccessible luxury,\u201d but doesn\u2019t want to be boxed into such a characterization. Similarly, Toteme, the Swedish fashion specialty brand, is positioned between contemporary and accessible designer fashion.<\/p>\n
\n\t\u201cThey\u2019re all investing in making better-quality garments, because customers want higher quality and lasting items,\u201d Lazarus said. \u201cZara management has said it\u2019s not about the race to the bottom. It\u2019s about building a better item. The customer will pay for something better.\u201d (Zara reported a 9 percent second-quarter sales gain.)<\/p>\n
\n\t\u201cThe categories killing it are back-to-office \u2014 blazers, tailoring, suiting, cardigans, little heels,\u201d Lazarus said. \u201cHigher-unit retail is doing better than casual.\u201d<\/p>\n
\n\tThe best-performing specialty brands, she said, are stealing market share. \u201cTotal market is growing at low single digits, at best.\u201d<\/p>\n
\n\tAccording to Susman, \u201cThe Ralph Lauren team continues to do a masterful job creating a global multiple lifestyle appeal all within the Ralph Lauren world,\u201d whether it\u2019s someone wanting to buy a cup of Ralph\u2019s Coffee, dining at the Polo Bar or shopping the core Polo Ralph Lauren collection. \u201cThey\u2019re making their money on the bread and butter label, not Purple Label,\u201d the highest priced, most luxurious tier of the brand. <\/p>\n
\n\t\u201cBut everything the team there does conveys a desirable lifestyle and how people want to live,\u201d Susman said.<\/p>\n
\n\tRegarding the Gap brand, he said: \u201cThere is reason to go back to it. The merchandise, the marketing, and the presentation in-store and online is what we remember the Gap for, and why we love it again.\u201d<\/p>\n
\n\tJohnson said within the Urban Outfitters portfolio, it\u2019s the Free People, Anthropologie and Nuuly businesses driving the double-digit growth, while the namesake Urban Outfitters brand is showing improvement in the wake of turnaround efforts. He described Aritzia\u2019s expansion as \u201cthoughtful\u201d and focused on the U.S.<\/p>\n
\n\tBut for any successful specialty brand, Johnson said: \u201cIt isn\u2019t just about adding more square footage. It\u2019s about also bringing real newness in.\u201d<\/p>\n
\t\t\t\t\tCoach style.<\/p>\n
\t\t\t\t\t\t\t\t\tCourtesy Coach, Canva<\/p>\n
#Standout #Specialty #Retailers #DoubleDigit #Gains<\/p>\n","protected":false},"excerpt":{"rendered":"
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