Will it bounce back? Retailers, knitters say 'No sweat'
NEW YORK -- Retail sales of active fleece and T-shirts have slowed this fall, but retailers and manufacturers expect to end the year ahead of '92, even if it's a mid-single-digit increase.
Retailers attribute the lagging sales to a still-down economy, stale styles and late fall weather.
At least one retailer said freshness in styles and colors will be needed to perk up the business. But most retailers said fleece leaders like Russell and Champion will always sell, despite outside forces.
At Herman's Sporting Goods, which has 124 stores on the East Coast, the basic fleece business is still solid, although maybe not quite as strong as it had been in past seasons, according to Stuart Kessler, executive vice-president and chief merchandising officer.
'Once the weather breaks, the business will come back to the normal levels of penetration in our market,' he assured. 'I don't want to chalk up the whole business on the weather. There are underlying murmurs regarding the economy, but the heavyweight fleece category is weather-focused.'
In blank T's, Kessler said Herman's has a strong workout shirt business. Surprisingly, he said his licensed T-shirts sales were not as robust as he would have liked.
'Major League Baseball shirts were a disaster,' he said. 'And football is okay, but there's no great presence there. The most powerful team is the [NHL's] Mighty Ducks and they continue to be strong. The Ducks certainly have been a welcome addition to the licensed business.'
The licensed NFL fleece has been 'disappointing,' Kessler added.
Alternately, at City Sports, Boston, the demand for Champion product has 'slowed tremendously,' according to Jeff Conor, apparel buyer.
'We're a more sports-oriented store, but people are looking for more garment-dyed T's, sweats and anything else garment-dyed,' Conor said. 'Here, the reverse-weave athletic cut is out and over-sized, casual and fuller pieces are in.'
Conor said Los Angeles-based Cotton Stuff has been a 'great' resource for him. He said he's seeking more garment-dyed fleece like the kind Cotton Stuff is doing, but that is an untapped area of the business.
Meanwhile, City Sports' T-shirt business is more difficult for Conor to gauge, since the retailer's five stores sell 5,000 City Sports T's each month at $6.99 each, he said.
'So when people ask me about the T-shirt business, I say mine's fine,' he said with a laugh. 'But we do a lot of garment-dyed T's and printed goods from Nike and Lifeforms. And No Fear of California is hot right now. They'rea three-year-old company that puts out world-driven T-shirts. We're not strong on blanks. If people are looking for a blank, they'll go to the Gap.'
He didn't feel oversaturation is a problem, except in the sense that 'the fleece and T-shirt business is a lot of the same old same old.' The business can be arrived with more product like Cotton Stuff, he said, a resource he heard about through Paragon Sporting Goods in New York. Paragon, which couldn't be reached for this story, has stated that Cotton Stuff is catching on because its sportswear styles and alternative colors are different from standard athletic fleecewear.
At J.C. Penney, the fleece and T-shirt business is up, according to Mark McMahon, merchandising manager for Simply for Sport, the retailer's active wear department. 'We had a strong early fall in T's. And fleece is doing exceptionally well. Bookings are ahead of last year, and our sales are ahead of plan.'
August and September sales were very strong in both licensed team apparel and branded product bearing the Russell, Champion and Penney's private labels, he said. McMahon added that while basic colors like gray are still top performers, fashion colors, which number 10 at Penney's, are doing better than in past years. Plus, he said, anything with a blood is selling.
On the manufacturing side, Tultex, of Martinsville, Va., is doing a mixed business. Kathy Rogers, director of corporate communications, said the company's T-shirt business, which is new for Tultex, is still very good but it's experiencing 'price pressures' due to major competition. But in fleece, which is the staple of Tultex's business, 'third quarter sales are down compared to last year,' she said.
'Retailers were two and a half weeks late in taking the goods,' she explained. 'So we didn't see the revenues in the third quarter that we had anticipated. But business is starting to pick up now, so we hope to see our yearend revenues up over 1992.'
The weather could have something to do with it, she said, since many areas of the country are just starting to experience cooler weather. But the slowdown should not have a lasting effect on the company, she said.
In fact, Tultex expects to see growth in both areas, especially in T-shirts, and in the licensed team apparel business, where the majority of the company's growth lies. Additionally, even with the tougher competition, the company won't be changing its style direction, Rogers said.
'You won't see us adding silhouettes to our line, but we will experiment with weights and fabrications,' she said. 'We hope we can continue to add value to our product in those ways as opposed to detailed sewing and complicated styling.'
At Russell Athletic, of Alexander City, Ala., there is agreement that the fleece and T-shirt business is relatively slow and oversatured. However, Wesley Haynes, vice-president of marketing, said Russell's T-shirt business is up.
'But it is a tight market, and there are a lot of price concerns and price pressures.' he said. 'It's competitive. A lot of manufacturers are looking at pricing. But we feel we're offering better value for the product.'
He said that although there are early indications that the fleece business is flat, Russell's fleece is still very strong, with shipments this fall up over last year's. Besides the company's 100 percent cotton fleece product, Russell recently developed new technology that eliminates pilling from polyester/cotton sweats, which is the largest share of fleece for the company.
Slow retail sales have led to an oversupply problem at Bassett-Walker, where sales are expected to be slightly down as the year finished out, according to Mackey McDonald, president and chief operating officer of VF Corp., Bassett's parent.
'The biggest factor has been the supply; we have excess capacity in the industry right now,' he said. 'But retail is beginning to pick up and we've had a boost from the weather so we see reasons for an increase in '94.'
Currently Bassett-Walker has reduced capacity in some of its finishing and knitting operations, enabling the company to compete more efficiently until business picks up, McDonald said. He added that the market is fairly stable now so he expects demand to pick up soon.
Ted Wilson, vice-president of marketing for Jerzees, the mass-market-label division of Russell, said he is optimistic that his fleece business will finish ahead this year. He cited Russell's non-pilling technique as a factor that's 'kept us in the ballgame.
'Certainly there's an over-supply in the sweats and T's industry, so we have to get out there and fight for market share,' he said. In somewhat of a diversion from others in the industry, a spokesperson at Champion said the overall fleece market in general seems to be up 6 percent, with demand remaining very high in all channels of distributing, which consists of department, specialty, and sporting goods stores.
