Fear Factor

Published: Tuesday, February 12, 2008

By Elizabeth Thurman

Vendors look for innovative ways to combat a shaky economy.

The threat of recession and a frenzied retail climate are perpetuating uncertainty in apparel, but contemporary and young contemporary manufacturers are digging in their heels and using innovative product, international business growth and reorders as a hedge against a shaky economy. Meanwhile, other companies are launching divisions to attract new customers or cutting back offerings and costs to offset unpredictable markets.

After a difficult holiday season and consequent buyer reluctance, the National Retail Federation projects that retail sales will rise 3.5 percent in 2008, almost flat against a 3.7 percent increase last year. However, industry rumblings that consumers could get a boost in spending power have been heard recently, as a result of the Bush administration's proposed economic stimulus package and lower interest rates on variable debt. To lure potential spenders, manufacturers are upping the design ante with special, must-have items that feature lots of color and architectural interest.

"Current buyer behavior has been cautious but overall optimistic, at least with our company," said Single designer and owner Galina Sobolev. "Majors were experiencing a slowdown at the end of the year, but I feel that innovative specialty stores always shine in tough times and come through because they take more risks, try new merchandise and are willing to test really new and exciting product."

Sobolev said the Los Angeles-based company did $15 million in volume last year, due largely to expansion in international markets because of the weak

dollar. London, Russia and Dubai are among the fastest growing areas, she said. Volume for 2008 is expected to increase 20 percent.

"Our customer still has to go to dinner, on a date, to an art gallery or to a cocktail party, and no matter how tough the financial climate, if she is excited by the product that she sees she will buy it," Sobolev said.

To entice customers, Single offers shift dresses in prints and jacquard, fitted jackets and men's wear-inspired trousers for fall, trending toward cleaner silhouettes and closer fits. Wholesale prices run $58 to $92, and Single's new cocktail dress division, After Eight, is priced $168 to $242.