Analysis: Retailers play catch-up in fashion speed race

Tue Apr 24, 2012 1:47pm EDT
 
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By Nivedita Bhattacharjee

(Reuters) - After years of losing customers to Europe-based retailers that give young shoppers fresh fashions more quickly, clothes retailers are fighting back.

To pick up speed, companies like Gap Inc (GPS.N: Quote), American Eagle Outfitters (AEO.N: Quote) and Macy's Inc (M.N: Quote) are placing smaller orders in more factories, and waiting until the last minute to say what colors and cuts the fabric should take. They are also slashing the time clothes spend in warehouses, industry experts said.

"The millenials, with their constant fickleness in product selection, speed, newness and freshness are very important and so there is a heightened need for traditional American brands to increase speed," said Matt Katz, a partner at the Boston Consulting Group, which advises retailers.

Over the past few years, clothiers have shrunk their typical concept-to-store times down to about six to nine months, from a previously glacial 12 months.

That seems like a big improvement until you know what some competitors are capable of.

"The emergence of H&M and Zara and the ability of these companies to follow fashion trends and produce products in six weeks or less has added to the pressure," Katz said.

Robert Hanson, American Eagle's new chief executive, is looking for ways to cut down on delivery times and respond faster to styles and trends. Macy's is trying to speed its decisions on what clothes to put on its shelves for young women.

How much further fashion retailers can go, or should go, in the quest for speed is a question that involves everything from margins to corporate culture and a reliance on cheap but distant Asian manufacturers.   Continued...