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New launches also will have a hard time showing retailers’ consistent sales for the simple reason they don’t have much of a track record. In contrast, some of the established brands are expected to perform better on paper this fall compared with last fall’s dismal figures.
“This fall will be crunch time for a lot of young and new designers,” Wolfe said. “Even specialty stores seem to be looking at lines that have a performance record already. Retailers want a guarantee that it’s going to sell.”
Jeffry Aronsson, founder of the Aronsson Group, noted that undercapitalized houses that incurred expenses in anticipation of business that didn’t materialize are at a particularly high risk.
“I would imagine that there will be a number of companies that won’t be able to survive,” he said.
Adding international distribution will be essential for these smaller firms, among other strategic moves, Burke said, to avoid depending solely on one economy. To do so, however, often requires the help of local distribution partners.
“Many are looking strategically at how to position their opening prices, their core product and their international business,” he said. “Those are the three things they have to do to survive.”
Several designer firms have used the last year to make adjustments to their businesses to stay viable, and they take issue with the “make-or-break” mentality.
Doo.Ri designer Doo-Ri Chung added a lower-priced line called Under.Ligne, and she said there has been some positive news amid the industry’s overall gloom.
“We have landed two new accounts, and even though [retailers’] budgets have been slashed, we managed to grow in a small way,” Chung said. “We are pretty much trying to do a lot more with what we already have. I think it would have been a different story had we planned on a major expansion and already invested in it. We already braced ourselves and I don’t feel it is a make-or-break season.”
Behnaz Sarafpour said, “I don’t think there is such a thing as a make-or-break season. We have gone through a year now of learning how to adjust, whether it is offering a different assortment of product or price point.”
Sarafpour said she has adjusted her distribution strategy because of the recession.
“When things were better, we were more focused on individual large orders,” she said. “Now, we are not about selling a lot to one place with one order. We are more diversified now with more stores and do business with more smaller orders rather than working with a few with giant orders. If somebody hasn’t been able to make adjustments and run out of cash, it could be [the break season]. But I wouldn’t say that as a general for the industry.”