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Tariff Impact Top of Mind at NY Apparel Shows as ‘Prices Will Have to Go Up,’ Vendors Say

What recession?

Buyers at a suite of New York City trade shows were still wheeling and dealing and on the lookout for what’s new for Spring and Summer 2020, as well as for immediate deliveries for Fall and Winter 2019. However, some vendors convened at the Jacob K. Javits Convention Center voiced concerns over tariff situation fueling the protracted trade war between the U.S. and China.

For the most part, the shows–Coterie, Moda and Fame for apparel, Sole Commerce for footwear and Coterie Accessories for accessories–saw decent, but not robust, traffic over their Sunday-to-Tuesday duration. While the mornings were slow, activity picked up in the afternoons.

Coterie

Booths at Coterie, representing higher-end contemporary brands, seemed to attract the best and most consistent traffic flow among the shows.

Alex Goldstein, sales manager at Kendall & Kylie, said the Khardashian siblings’ brand generated solid traffic on Sunday, while Monday saw the continuation of pre-scheduled appointments and walk-ins, he said. So far, the Spring/Summer ready-to-wear Black Label collection has been “well-received by buyers and the media.” The line ships starting February 2020.

“Buyers have put in orders,” Goldstein said, noting he didn’t see any signs of a pullback or slowdown in orders placed. And no one has even mentioned the “R” word. Wholesale price points ranged from $20 to $60, and at 2.4 turns, would retail between $50 to $150.

Haley Shine, the sales manager at Waverly Grey, where most tops wholesale at $60 to $70 each, said traffic at the booth has been “consistent. It’s been good. They are placing orders.”

Beach apparel collection For Love & Lemons was showing combinations of bright tangerine and line green. The sales representative, who requested anonymity, described Sunday traffic as “fantastic.” While traffic had dipped a bit Monday morning, she expected it to pick up in the afternoon, which would follow the patterns she observed on Sunday. And as for recessionary concerns down the pike, the sales rep said, “Not so far. No one is mentioning the recession word, fortunately,” she said.

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Gretchen Neal, whose eponymous brand combines casual styling with fine Italian cashmere and linens, said she’s had a number of appointments with repeat buyers. Price points at retail range between $400 and $500 per item, and she said orders placed have been consistent with prior activity. “Most of my colors are beige and taupe, the neutrals, while some have color-blocking,” she noted.

Some boutique owners walking the Coterie show declined to comment about the possibility of a recession. And none of them indicated any plans to pull back on orders for next season.

Moda

At the moderately priced contemporary show Moda, apparel brand Berek was selling tops and jackets that wholesale between $24 and $124. Paula Ramirez, account representative, said traffic was consistent for the firm compared with prior shows. Buyer interest was mixed between Spring merchandise and those available for immediate deliveries. “There’s been no pullback on orders,” she said.

Ryan Knopp, the owner of the Esqualo apparel brand, said, the Moda show on Sunday was very busy after lunch. While he was showing spring and summer 2020, the owner noted that many buyers were focused on immediate shipments for fall and winter 2019. Some buyers were asking if spring and summer items could be shipped now, even though he’s said deliveries were set for between January and March 2020.

Blouses wholesaled for $32, with tees around $20. Dresses were around mid-$30s, and skirts in the low-$30s.

While he hadn’t seen or heard of any recessionary concerns from buyers, Knopp believes that “all the prices will have to go up” at some point.

Knopp’s clothing is produced in China and so far he hasn’t raised prices for the spring line that was manufactured before the tariffs on apparel went into effect. He also doesn’t plan to hike prices for the summer collection. “There’s only so much you can raise prices. You have to look at each item and then make a decision,” he said.

The brand is also sold in Canada, which isn’t impacted by the tariffs. He’s toyed with the idea of raising prices by one dollar on U.S. sales and by the same amount on sales in Canada down the road as a way of offsetting the added costs if tariffs continue.

“We took a hit in the winter and again in spring. There’s only so much one can do. We know that prices eventually will go up for everyone,” Knopp said.

Tony Drockton, chief people officer at Hammit, a handbag and accessories brand exhibiting at The Accessories Show, isn’t seeing any indication of a slowdown due to recessionary fears. “Our brand is positioned to do better when things are more difficult. People generally want to fall back to higher quality. People want to trust a brand. They may buy less, but they still want the higher quality in what they do buy,” he said.

As for pricing, Drockton said his brand has been raising prices every year for the past three. And so far, he hasn’t seen any pushback on this strategy. That pricing ability no doubt has helped the firm navigate higher production costs due to the increase in tariffs.

While Drockton would like to see some resolution to the trade war, he also said he’s sticking with existing production plans and staying in China.

“If you want the highest quality and timely delivery, you have to be where it’s happening, and that’s China. China is where you have the highest quality in supply chain and timely delivery. Companies that are chasing price always give up on quality and delivery  times,” Drockton explained.

Several firms that he knows that have moved production from China to new factories have been dealing with late deliveries or have suffered quality issues, Drockton added.

Sole Commerce

At Sole Commerce, Michelle Herrera, account representative for Nalho footwear, said sales were soft Sunday, but seemed to be picking up by mid-Monday. The brand, best known for its “yoga mat” comfort insole espadrilles, saw many of its appointments booked by existing customers. Nalho’s footwear consists mostly of sandals produced in China, but so far the brand hasn’t seen the need to increase prices.

Fame

Traffic seemed to be hit or miss for some exhibitors at Fame, the contemporary show targeting younger consumers in the juniors or teen market. Some exhibitors believed attendance was falling for the show and the current traffic pattern wasn’t exactly new, as some vendors in prior seasons had voiced similar concerns. A number of exhibitors did seem to attract consistent traffic, such as Do + Be Collection and Just Black Denim.

One exhibitor who said he’s seen slowing traffic was Matthew Choi, sales manager for Sneak Peek.

“I think the show has been on the decline. We do five Fame shows a year, and have been doing this for the past six years. Some [booths] are doing well, but we see buyers pulling back on orders. With more vendors at the show, there are also more options to choose from,” Choi said.

He noted that in the past, a buyer with a set budget might allocate it at one vendor, maybe two. Now with the increase of vendor options, that buying dollar is stretched across three, four or even five wholesalers. Sneak Peek gets a portion of the pie, but end up with a much smaller component of market share as a result, he said.

One buyer walking the aisles, who requested anonymity, said she’s also been checking out some online platforms, citing their streamlined processes but adding that she still likes to walk the show to discover what’s new.

Digital platforms

Coincidentally, as the digital platforms gain traction, they also are seeing a need to establish a presence at Fame. Fashion Go, one such platform, brought six vendors to Fame this year out of the 1,000 on its site, according to Jina Pyun, Fashion Go account executive. Included among brands Fashion Go brought to Fame are Listicle, Sophie Maries, footwear brand Ccocci, snf denim brand Just USA, whose price points range from $19 to $22 a pair.

“This is our first time here. Sunday seem slow, and today slower,” Pyun said. While no one has yet to mention the word “recession,” she did note that most of those who placed orders are already familiar with the platform.

Cash-and-carry

UBM, which operates the shows, a few years back introduced a “cash-and-carry” component to the shows. Generally filled with small leather vendors or jewelry booths, the idea is to provide buyers the opportunity to make purchases on the spot that they can take with them.

Trinkets, such as fashion jewelry, make up most of selling in the section. Vendors this time around sold $7 bracelets and $8 to $13 necklaces–some made from real stone beads. This section garnered significant attention from buyers, not to mention that most who looked also tended to walk away purchasing a few items.