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WHEN THE GOING GETS TOUGH...

MODERATE VENDORS ARE MAKING THE MOST OF IT BY TEMPTING CUSTOMERS WITH LOWER PRICES AND MOVING INTO UNEXPLORED MARKETS.

Byline: Shirliey Fung

Manufacturers in the lower tier are finding that the strong only get stronger during times of downturn.

Using a range of tactics from focusing on new segments of the market, to emphasizing volume over price, to launching new lines, companies are finding that they may be able to increase and not just maintain their volume this year.

Chuck Goldstein, president of Confetti, views the economic downturn as an opportunity in disguise. His plans for the seven-year-old vendor include reaching out to a new customer base.

"The economy is rough; people are looking for clothing in our price range," said Goldstein. "We're selling people that we've never sold before. We've probably opened 1,000 accounts in the last six months."

Goldstein said that the nearly $3 million company typically grows about 10 percent each year, but that this year, with the advent of all the new accounts, the vendor is looking for a 33 percent increase -- though something in the 25 percent range is more likely.

Confetti would also like to break into department stores and add 200 of the bigger doors to its current 4,000 specialty-store base. "It's our biggest challenge this year," said Goldstein. "We're going to go after them personally and see what we can do."

Marty Klein, executive vice president in charge of sales and marketing for Kaktus, is blunt about his strategy for drumming up business in the upcoming year: "We don't wait until other people mark us down; we knock down our own prices," he said. "We're taking high moderate looks and bringing them down to low moderate pricing."

For example, blouses that sold last year for $12-$14 wholesale will go for $8-$10, while related separates will drop from $12-$14 to $8-$10.

"We're taking a bigger risk, but the risk-reward ratio is great in terms of saving for the customer, and we'll make it up in volume," Klein said.

Kaktus, which was established in 1990, currently resources 600 doors, with 40 percent of that business going to department stores and 60 percent to specialty stores. The company's price-slashing tactic will bring in five to 10 percent more volume in 2001, Klein estimated.

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