Industry executives point out contemporary collections have gotten too big, they’re over-assorted and not focused enough.
WOMEN'S WEAR DAILY | LISA LOCKWOOD
The contemporary category is struggling to become, well, more contemporary.
Faced with a highly promotional retail environment, a slowdown in store traffic, intense competition from the web and fast-fashion chains, contemporary’s large legacy players are trying to reinvent themselves while newer, more agile companies are gaining market share.
“I think contemporary has been especially challenging,” said Robert Burke, chief executive officer of Robert Burke Associates, the luxury consultancy. “It had been so predictable in the way the customer wanted it to be predictable.”
For years, if a customer liked a particular pant, she’d buy four or five every single season, or if she liked a particular dress or wanted a career suit, she’d have a certain brand she’d go to, he said. “It was much more defined. A lot of that is just not what’s happening today. The customer is moving so fast on so many levels and she’s incredibly educated and not as predictable as she once was. It’s caused the brands to reevaluate where they are today.”
Several industry sources blamed the category’s woes on too much sameness in the market, the high prices attached to legacy contemporary brands, less expensive options coming from some of the South Korean and Australian labels that are more trend-driven, and many less expensive options from Zara, H&M and direct-to-consumer firms such as Everlane, Revolve, Asos, Boohoo, Modcloth and Ayr.
“The customer is still buying clothes, but they’re looking at brands like Reformation out of Los Angeles, which is strong in its online marketing and connecting to the consumer,” Burke said.
One retail source noted that especially in spring and summer, the consumer is looking for fun, colorful, festive and romantic looks, and some of the legacy contemporary brands, such as Vince and Theory, are much more serious. “When we move into fall, we’ll see a little more action in those brands because they have investment pieces,” the source said.
Susan Sokol, president of Susan Sokol Consultancy, pointed out that the larger contemporary brands that are overly distributed and more saturated are having the most challenges. “That customer is much more aware of prices and she’s not as devoted to one particular brand. She’ll change it up,” she said.
Soko believes that customer is more exploratory and likes to shop online and at specialty stores such as Forty Five Ten, Hirshleifers and The Webster, where “she’s finding a mix and it’s more exciting for her.” She cited some contemporary brands that are doing well such as Alexis, Jonathan Simkhai, Caroline Constas, Ulla Johnson and Nili Lotan. “She [Lotan] does an amazing job. She really found those core business drivers. She borders between entry-level designer and advanced contemporary,” Sokol said.
Kim Vernon, president of Vernon Co., agreed that the contemporary customer now shops many brands, big and small, for exciting, fun fashion pieces, in smaller multibrand stores, single brand shops and online. “The 20-year-old contemporary brands are not keeping up with fashion, trend and newness that some of the smaller independent brands offer, causing an erosion of their former market share,” she said.
Frank Doroff, vice chairman of Bloomingdale’s, said the contemporary business is “comping up, in the low-single digits.” He said the legacy brands have been a little softer. Where he’s seeing good results are in the denim business, Aqua, and elevated T-shirt brands such as ATM Anthony Thomas Melillo.
“Things that appeal to a younger customer and more fashion-forward customer have been very good,” Doroff said. “So have our high-end, more advanced denim brands such as Mother and Frame,” he said. He noted that some elevated T-shirt brands, the active business, and some new boho brands such as LoveShackFancy have sold well. “We’re selling a lot of shirting. The shirting trend was great for business from everybody,” he added.
Leah Kim, executive vice president, general merchandising manager, women’s at Barneys New York, said, “Overall, the business in this [contemporary] space has been soft.” She said Barneys doesn’t carry such legacy brands as Theory, Vince, Diane von Furstenberg or Joie, but carries T by Alexander Wang, which is doing very well. Among the brands in this area that are also doing well are Off-White, Monographie, its Saloni exclusive capsule collection and Warm.
“We have been seeing a shift from casual or oversize looks to elevated feminine looks. At least that’s what the Barneys customer is looking for right now. The streetwear trend is also still very strong into fall,” she said. The retailer continues to focus on securing exclusive brands as well as exclusive packages to draw customers’ interest and to bring them into Barneys over the competition. “We also have many exciting in-store activations and customization events planned for fall that will create a lot of buzz and bring people into the store,” Kim said.
Saks Fifth Avenue re-branded that zone of the business as The Collective. “We believe contemporary is a tremendous opportunity for us,” said chief merchant Tracy Margolies. “It’s curated. We’re focused on mixing brands and mixing pieces. It’s not a monobrand store. We show you how to do it. We’re really going after trends.” For fall, the store is highlighting velvet and the jacket.
“We really get behind these trends in a big way from all vendors, all categories. Lastly, it’s current and featuring new of-the-moment designers,” she said. Saks has added a handful of new vendors this fall such as Maggie Marilyn, Ganniand Amo Denim.
Margolies said the legacy brands are still important, and there are designated spaces for them. “Our clients know Saks and they come to Saks for some of those legacy brands. They’re definitely a core resource, and what makes it fun is mixing and matching those brands together with some of these smaller brands, or even back to denim,” she said.
What’s changed over the years in contemporary is the influence of social media. “What happens is social media and influencers drive trends, and people come to the store and they want that now. We’re working fast and furiously to make sure we service the trends that are on social now and how quickly can we get them. Our vendor partners are looking to work quicker on lead times. The whole ‘buy-now-wear-now,’ they want to wear it that night,” Margolies said.
“I think this zone of business is changing. It’s not just the legacy brands. The business is changing in general because of social media, things are moving faster,” she said. “Thezone is being much more trend driven and we’re adding new and emerging designers as well.”
She noted that brands such as Zimmermann, Jonathan Simkhai and Cinq à Sept are “doing great.”
Lori Friedman, owner of Great Stuff, a contemporary women’s specialty retailer with five stores throughout Connecticut and New York, said she continues to do well in the category. “It’s all in the buy. I try to aim for brands that are not in department stores, but I don’t always get that,” she said.
Friedman has done well with brands such as Sea and Nili Lotan. “She’s fabulous,” she said of Lotan. Price, she said, isn’t a major factor in the sector. “It’s good when it’s expensive. They seem to want a better product,” she said. She finds what resonates with her clientele is different from what they can buy in the city. “It’s still casual. In the city, it’s more urban. My customer wants lifestyle clothing. She wants clothing to wear on the weekends and Saturday nights when she goes out to restaurants,” she said.
According to Julie Gilhart, a fashion consultant who spent 18 years as fashion director of Barneys New York, the contemporary category truly came into its own when a few key people were delivering style at a price such as Phillip Lim, Alexander Wang, Rag & Bone, Vince and Diane von Furstenberg. Since, the consumer’s attention has splintered.
“They were all of a sudden able to give this designer look for a price and that’s where the traction was, and they started to build a business. What’s happened is the emergence of online, you can shop the web, you’re not limited to have to go into the store, and you have a lot of options. Then you have the fast-fashion brands that have come up. They can deliver a good style at a good price. All of a sudden, you have two categories, you have street brands that really feel in style and are appealing to more than just street kids. Off-White is the quintessential example, and look at Supreme which is collaborating with Louis Vuitton. You have people like Kanye [West], Heron Preston, and they’re getting a lot of attention. Then you have the whole sport thing,” Gilhart said.
Like others, Gilhart pointed out that the contemporary collections have gotten too big, they’re over-assorted and not focused enough. “That’s what the online part of the business has done. It’s made things become very focused. Then you have the growth of The Real Real, and the customer can buy an expensive piece and then sell it. There are many, many choices for the customer now,” said Gilhart, noting that customers frequently gravitate toward the brand’s story, content and Instagram. “If you’re a start-up brand, you’re into that world, but if you’re already a pre-existing business with your structure based around the department store, it’s hard to shift it. A lot of [legacy contemporary] brands grew through the department stores and are one step away from their customer, instead of direct to consumer.”
She encourages young brands to sell online, and then a small specialty store before tackling the department stores. She suggests selling on Instagram, too. “You can do as much business doing that as a young brand, than if you had one store buying your collection,” she said.
Gilhart recalled when she was at Barneys, it was easy for a new brand to start there because the retailer did everything for them. “We did their marketing, we did their sales, we were engaged, and it’s very different now. It’s only been the last five years, that buying online and on your phone, and social media has really influenced things,” she said. Interestingly, it used to be that selling into Barneys was a badge of honor. “Barneys gives an indication to the market in terms of where you are and what you do. But as far as the customer, it doesn’t really matter. They can go online and it doesn’t matter where they get it.”
“Probably one of the most difficult places to be right now is to be a contemporary brand in a department store,” Gilhart said.
Among the biggest problems facing the contemporary sector are the incessant sales going on that have influenced the way the consumer shops. She doesn’t need to buy it at full price, because if she waits, it will be marked down 20, 30, 40 and eventually 70 percent.
That constant sale mentality influenced one contemporary collection, ATM Anthony Thomas Melillo to develop a new business model outside frequent markdowns.
“The [current] model is based on markdown and not design. You have all these brands, they have an enormous amount of product, and in the end, what is the design, where is the lifestyle? Contemporary is an odd word,” Melillo said.
“I was not launching ATM to do what the legacy brands were doing, rather I was launching to fill a white space. To me the white space then and now was a brand that had the brand aesthetic of something dedicated to a new type of lifestyle I was seeing — the chic customer who wanted to look and feel relaxed, but chic and special, not mass. Legacy brands were pumping out a lot of clothing, but without a personal touch. Nothing about a piece of clothing that you can find in all avenues of distribution feels special,” he said. “We have always felt we do not need to be on every markdown and ‘friends and family’ promotion. This to us is the death of a brand,” Melillo said.
He said he does business with Bloomingdale’s and insists that they don’t mark it down, put it on sale or “friends and family” promotions. “If I can get that customer to still go in that store and buy me at full price, it’s a pretty good accomplishment on my end,” he said.
Andrew Oshrin, ceo of Milly, is showing gains by raising the company’s profile via social media and advertising.
“I think Milly is a bit of an outlier. We’re seeing some significant growth at our three biggest accounts — Saks, Neiman Marcus and Nordstrom,” he said. In addition to seeing some international growth in core product classifications, he’s also seeing 4 to 5 percent growth in its own omni-retail channels, where it operates two stores. E-commerce is trending up 15 to 20 percent.
Stacey Bendet, ceo and creative director of Alice + Olivia, said her business in department stores is strong. “We’re up at Neiman’s and Saks. And we are fighting a lot of the markdowns. It hurts our own stores. It’s hard for us to sell things at full price when everyone else is selling at markdown,” she said about the brand that operates 36 stores. “We’re in the world of Amazon. Everything is available at the touch of a button. You have to make your shopping experience and your brand experience easy for the busy woman.”
Bendet believes the department store retailer “needs to act as curators and stores with a fashion point of view, instead of becoming a market of everything. If they become OK with downsizing a little bit and becoming like a European department store model, I think they will go back to being successful. There needs to be a bit of a correction of the size that they are. I think we will enter this era of a boutique department store, instead of a mass department store. I think Amazon in its own way has crushed the concept of the mass department store.”
Alice + Olivia changed its business at Bloomingdale’s to a concession. “We manage it, we operate it and we control those markdowns,” she said. “We’ve had double-digit growth through that, in fewer doors. It’s been excellent. We’re managing that business and operating it, and it’s been really profitable and great.”
Jane Siskin, ceo of Cinq à Sept, is finding success in its first year of business. She had earlier been the licensing partner of Elizabeth & James.
“I think that we came into the market at the best time and maybe the worst time. It was the best time because the customer was hungry for new brands and that has been incredibly important to all the retailers, both majors and specialty stores. Everyone is always searching for something new. Obviously we came to market with a new brand with none of the new brand problems. They knew we were going to ship, they knew we could do reorders and would chase hot items; that was a big advantage. As for the worst of times, it’s no secret the retail environment is very challenged right now. We’ve been in a very interesting place, sort of nestled in the middle, between having something great and new with a tough environment,” she said. “I think that to grow a brand right now you really have to be in tune with what’s going on out there. You have to listen and watch every single day, what’s working, what isn’t working, where are you getting traction and where are you not getting traction? Categories you could always rely on are more challenging than others.”
For example, Cinq à Sept had a particular dress that sold everywhere. When she recut it in new colors, the customer was no longer interested in that dress. “In the past, you could sell that dress over and over again. The customer is more discerning. The higher-end customer, when she sees people wearing the dress, she isn’t that interested in buying the dress. When we added embroidery, it was excellent. You have to look and listen every single day. Your ear has to be to the ground,” she said.
Cinq à Sept is housed near more advanced contemporary brands such as Rag & Bone, ALC, Alexis, Jonathan Simkhai, Zimmermann, and Tanya Taylor.
Siskin said her business is split evenly between specialty and department stores, and frequent promotions at the latter are a fact of life.
“Listen, in order to grow a business with department stores today, you have to be a partner on all sides. Obviously, we’re not immune to partnering on the profitability side. But we’re much more focused on partnering on how to bring more people into the stores to shop, to bring more brand awareness, to create an experience. It’s a 360 strategy,” Siskin said
“The idea of putting goods in, hoping they sell, and paying at the end, as far as I’m concerned is antiquated and not sustainable anymore. Our challenge with the retailers is how can we make it better. We are hyper focused, laser focused on being part of the solution,” she said.