Apparel makers add e-commerce

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At a time when apparel companies are struggling to get a larger share of shrinking department store sales, the Internet looms as the next avenue for business.

This spring promises to bring several new Web sites for apparel sales and further development of existing sites, as more apparel marketers and retailers go online.

U.S. online apparel sales are projected to hit $641 million this year, nearly double that of 1998, according to Jupiter Communications.

Guess? relaunches its site to sell its sportswear directly to consumers on March 29. The site also eventually will be used to fill retailers' merchandise orders. It's the first time the marketer has sold its apparel and accessories on the Internet.

Ocean Pacific launched its Web site in March and plans to add e-commerce capabilities soon. Nike and Authentic Fitness Corp.'s Speedo International recently expanded their Web sites, and, to sell directly to consumers.


Sirena Apparel, a manufacturer of bathing suits under brands such as Anne Klein and Liz Claiborne, will start selling its products online April 1 at it site. The company also just inked a marketing deal with HangTen to expand its swimsuit offerings online.

And designer Kenneth Cole this summer will begin selling from the company site outfits from his most recent show. Web surfers glimpsed his new fashions when they logged on to a February Webcast of the show on the site. A week earlier, surfers swamped Victoria's Secret's 3-month-old site for a Webcast of its pre-Valentine's Day fashion show.

"We want to be able to reach our customer and serve them where they are," said Courtney Clark, VP-marketing at Kenneth Cole Productions, New York. For Kenneth Cole, whose men's wear collection appeals to 25-to-45-year-olds "with urban style," the Internet is reaching them where they live, she said.


Convergence has already arrived at The Gap's flagship store in New York, where shoppers can sit at Internet terminals and surf the company's and Web sites while they shop.

All of these developments raise some questions: How will e-commerce affect the already strained relationship between apparel manufacturers and retailers? Will it cannibalize store traffic or merely become a high-tech alternative to print catalogs?

Channel conflict may deter some manufacturers from setting up Web sites and selling directly to consumers, said Lauren Freedman, president of the e-tailing Group, an e-commerce consultancy.

"It might not be retailers' first wish for manufacturers to go directly to the consumers. They have some concerns about that," Ms. Freedman said.

But some executives at retail stores and apparel manufacturers say these channel conflict issues will be minimal, as the Internet will complement existing sales efforts rather than cannibalize them.

"It's no different than in the offline world, where many of our vendors have their own discount and full-price stores," said Barbara Geiben, Internet marketing manager at Bloomingdale's. "Customers will always shop multiple channels," she said.


The Internet will have a similar effect on retail as print catalogs already have had, said Kenneth Cole's Ms. Clark. For those people who would not buy via catalog,

the online store works as advertising, she said. They will still look online but go to the store to buy, she said.

Likewise, the Victoria's Secret site is a vehicle to attract male customers and is not cannibalizing store traffic, said Ed Razik, president of brand and creative services at Intimate Brands, the lingerie company's parent, and chief creative officer of Victoria's Secret. He said while store shoppers are 98% female, the shoppers who have clicked through to the company's site since it opened in December 1998 have been only 70% female.

"Men are more comfortable shopping on the Web," he said. Sales volume on the Web is additional business to the lingerie chain, he said.


Computer glitches and fulfillment are other problems altogether. Like many other e-commerce ventures, retailers and manufacturers--especially those that have never run a catalog business--also are vulnerable to problems filling orders, such as product that appears available online but is not in inventory.

Apparel companies say they are trying to address those questions.

Catalog-based apparel companies that also have their own retail outlets, such as Victoria's Secret, already know how to handle inventory and returns, so they don't face the same fulfillment problems as companies with catalog sales, said Margaret Gilliam, president of consultancy Gilliam Advisors.

Kenneth Cole's Ms. Clark said her company is "working very hard to get ahead of the game and use new technologies" to link merchandising and fulfillment.

Nike is only selling selected products from its Alpha Project line on through April as a test. An official site for online sales could launch as early as late spring. The test will make sure the company can process online sales, said Mary Kate Buckley, general manager of

To address the retail relationship question, the site also has a store locator feature that flags the nearest store carrying Nike product for the consumer.

Copyright March 1999, Crain Communications Inc.

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