California Apparel News

California’s apparel industry had its share of triumphs and challenges in 2004.

The industry prepared for a nearly quota-free world as the country forged new trade opportunities. The economy rebounded, and the value of the dollar fell. All the while, the industry watched its designers—and the L.A. look— gain international attention on the runway, in the stores and in the media.

Manufacturers made the transition to retail, and retailers reveled in the return to feminine fashion. The traditional mall was recast, and downtown Los Angeles became the hot new neighborhood. There were new partnerships and new technologies and a new focus on education for start-ups as well as established businesses.

American Apparel

American Apparel became a retail force in 2004, when the Los Angeles company opened 34 stores in the United States, Canada and Europe.

Founder Dov Charney’s retail division earns less than 10 percent of the company’s total revenue. But Charney said the division could earn up to 30 percent of the company’s revenue if he realizes his goal of opening 70 stores worldwide in 2005.

Charney has already put American Apparel on the map as a wholesale manufacturer of blank T-shirts, creating a phenomenal splash with his comfortable, form-fitting T-shirts and his marketing pledge to manufacture “sweatshop- free” garments.

Even with the introduction of retail, the company remains true to its core market. “We are a retailer to the screen-print industry— that’s the biggest thing we do. But the stores help expand that mission,” said Charney, noting that the more consumers buy American Apparel’s blank T-shirts and knits, the more consumers will want to buy screenprinted T-shirts.

As American Apparel grows, the mystique of Charney and his product increases. Publications, including The New York Times, have recently published long features examining the cachet of the company. These articles credit American Apparel with capturing the spirit of the times with its socially responsible marketing message, mildly risqueacute; ads and logo-free clothing sold at popular prices.

New York Times writer Ruth La Ferla summed it up in her Nov. 23 feature on the company: “The chain is seen as a new model for the marketing of hip.” —Andrew Asch

Bebe Stores

Manny Mashouf, founder and chairman of Brisbane, Calif.–based Bebe Stores Inc., could write a book on how fashion and business change at a lightning-quick pace.

At the beginning of 2004, Bebe was suffering a 15-month poor comparable- store sales streak. Women were buying casualwear and not the career and dressy fashions that have been Bebe’s core strengths since 1976, when Mashouf opened his first shop in San Francisco.

But in February 2004, women began to favor luxury and glamour again. Bebe’s samestore sales skyrocketed 24.2 percent that month and have remained consistently positive. The company is on track to end the year on a stellar note as one of a handful of specialty stores to earn double-digit same-store sales during a lackluster October and November.

Bebe was a top performer for contemporary casual women’s fashions in 2004, and retail analyst Liz Pierce wrote in a Dec. 3 research note that the company is positioned to do even better next year.

“Bebe continues to fire on all cylinders, as it has become very adept at delivering trendright, but well-made fashions to its customers at a lightning speed,” said Pierce, who works in the Los Angeles office of the Sanders Morris Harris Group. “We believe that being first to market with the latest runway looks has enabled the company to take market share from other retailers. And we believe that the story is far from over, as the company has the opportunity to increase its customer base via the extension and expansion of various merchandise categories—such as suiting, denim and accessories—[and through] the implementation of the Customer Relationship Management package and more targeted marketing.” —A.A.

Bravo

Bravo, an NBC Universal Cable Network, has continued to mine the style success it found with its Emmy Award–winning show “Queer Eye for the Straight Guy,” which launched in July 2003.

This month, the cable network debuted designer reality show “Project Runway” after conducting a well-publicized national search for designer contestants. The network will bow “Queer Eye for the Straight Girl” in January.

Created in December 1980, Bravo bills itself as the first cable service dedicated to film and the performing arts. It is now seen in more than 78 million households. It features original programming, including “Celebrity Poker Showdown” and “Inside the Actors Studio,” and syndicated series such as “The West Wing” and “Keen Eddie,” and it is the official U.S. network of Cirque du Soleil. In addition, it shows feature films; theatrical, dance and musical performances; and documentaries.

For Lauren Zalaznick, president of Bravo and sister network TRIO, the leap from performing arts to fashion was easy.

“Fashion is provocative because it is an art,” she said. “Bravo’s mission is to bring the essence of the arts and the performing arts in pop culture and entertainment to the masses.

“Queer Eye for the Straight Guy” is a powerful, taste-making show and is compelling because the style guru talks with passion about fashion and how it represents a person’s character, Zalaznick said

“There is something very primal about getting dressed up. Short of plastic surgery, it’s the only way to try on a different skin,” she said.

More than one million viewers tune in each week to watch new episodes of “Queer Eye for the Straight Guy,” in which the “Fab Five,” a team of gay men who transform a style-deficient straight man from drab to fab, concentrates on fashion, food, interior design, grooming and culture. Men are taking the Fab Five’s advice to heart, according to a recent national survey that found they were five times more likely to go shopping than women the day after a new “Queer Eye” episode.

In addition to the upcoming “Queer Eye for the Straight Girl,” the show has spawned a British version of the original concept.

The network’s latest fashion venture is “Project Runway,” which gives aspiring designers the opportunity to break into the fashion world. Zalaznick said that Bravo’s focus on the fashion industry is an outgrowth of the network’s fascination with the creative process; “Project Runway” gives a behindthe- scenes look at the design process in a way that is tailored for the masses.

“I think fashion has not been terribly well covered,” Zalaznick said. “No one has really looked at the essence of the fashion industry.” —N. Jayne Seward

California Fashion Association

The California Fashion Association was created with the idea of promoting and tracking the state’s apparel and textile industry. It is especially important now that many local manufacturers are making more apparel overseas.

The nonprofit is headed by Ilse Metchek, an industry veteran with more than 30 years of experience as a designer and as the head of her own apparel company, Ilse M. Inc. She serves as the organization’s executive director and only full-time employee. Lonnie Kane, president of contemporary womenswear manufacturer Karen Kane Inc., is the president. And Stan Levy, an FBI co-founder and an attorney with Manatt, Phelps & Phillips LLP, keeps CFA members and others in the industry apprised of legal issues.

Metchek is a one-woman tour de force who has been able to get the apparel and textile industry more visibility in Sacramento and in the state’s economic statistical outlook. She worked this year to get the industry included in the Central City Association’s downtown Los Angeles economic forecast in addition to the Los Angeles County Economic Development Corp.’s economic report.

The CFA has also worked to market California’s fashion industry. The Intersection—a joint marketing effort to showcase the California Market Center, the Gerry Building, the Cooper Design Space and The New Mart at the junction of Ninth and Los Angeles streets—got its start when Metchek invited the four people who run the major showroom buildings to meet in her office.

On the education front, Metchek represented the CFA in Sacramento to discuss how the state’s new middle school and high school curriculum should be changed. As a result, the traditional home economics course is being replaced by a life sciences class that will include such subjects as apparel, home furnishings, fabrics and interior design. Also California State University, Los Angeles’ textile production and management extension program, which will begin in January, got started with the help of Metchek and the CFA.

Throughout the year, the nonprofit organization hosted a number of seminars, panel discussions and lectures by industry leaders and experts to educate apparel and textile manufacturers about international customs, public relations, labor and cash-flow issues. In May, Janet Labuda, director of U.S. Customs & Border Protection’s textile and apparel enforcement division, spoke to CFA members about stepped-up inspections to uncover illegally imported goods. —Deborah Belgum

Cooper Design Space

Steve Hirsh, proprietor of the Cooper Design Space in Los Angeles, shifted gears two years ago and turned part of the 1927 manufacturing building into a trade show venue and contemporary apparel wholesale showcase. The strategy is paying off. The Cooper Design Space is emerging as a contemporary marketplace, grabbing the attention of buyers and making its neighbors pay attention.

With labels such as Twelfth Street by Cynthia Vincent, Lotta and Pegah Anvarian and temporary shows Designers & Agents and Project L.A. on the redesigned 11th floor, buyers cannot afford to pass up the Cooper during Los Angeles Market Week. D&A will host three events there in 2005 and may expand to five events a year, said D&A representative Belinda Perez.

“It’s working out perfectly for us,” she said. “The exhibitor base is building up constantly, and we’re getting more market traffic, as well.”

The Cooper will also open up its sixth floor to showrooms in time for the Fall market. The first, second and third floors are currently open for wholesale space. With its open floor plans, natural light and prime location, the building has lured some tenants from neighboring buildings.

And it is not just the apparel industry that has taken notice. Hirsh has opened up the top floor to outside events, as well as movie and television productions. In May, Nokia used the building to release its new N-Gage gaming technology during the E3 electronics and entertainment expo. More recently, the Cooper hosted the StyleCareers job fair, during which about 1,000 apparel designers and production workers met with top apparel manufacturers and retailers for potential employment.—Robert McAllister

Decline of the Dollar

Along with fluctuating hemlines and waistlines, California’s apparel industry has had to track another variable in 2004: the value of the dollar.

Since Dec. 31, 2003, the dollar has fallen about 7 percent against the euro, 9 percent against the British pound and 4 percent against the Japanese yen.

As a result, the dollar’s decline in value has proven to be both a boon and a bane to manufacturers. Exports to overseas markets have become cheaper, increasing sales and creating new opportunities for domestic companies. On the other hand, imports such as European fabrics have become pricier. The weakening of the dollar has not had an impact yet on the cost of making products or conducting business in China, as that country’s currency, the yuan, is pegged to the dollar. But some designers who manufacture their clothes in China said that if the dollar slides further, they could slightly increase their prices.

Jack Kyser, chief economist at the Los Angeles County Economic Development Corp., said a declining dollar could give somewhat of a boost to California exporters and that the prospects for California luxury goods are bright. But he said it is difficult to assess how the weak dollar has affected retailers. A customer at Bergdorf Goodman and other high-end shops might not reel from the sticker shock amplified by a weak dollar, he said. “If you go to Nordstrom, you might pay a little more attention to it,” he added.

The dollar’s descent will likely continue. According to Global Insight Inc., an economic consulting service based in Waltham, Mass., the dollar is expected to fall about 6 percent in 2005 and 1 percent in 2006. —Khanh T.L. Tran

Fashion Business Inc.

This year, Fashion Business Inc. added “retailer” to its list of resources for up-andcoming apparel companies, thanks to a deal with online marketplace eBay, which helped open an online boutique at www.ebay.com/lafashion. Frances Harder, a former associate professor at the Otis School of Art & Design in Los Angeles, started FBI five years ago as a place where new Southern California designers and manufacturers could learn how to grow their companies. FBI has become a learning hub where newly minted designers and businesspeople can attend classes and seminars on everything from the ins-andouts of manufacturing overseas to drafting a business plan.

The nonprofit organization, which has two full-time staff members, is located in the heart of the Los Angeles Fashion District in The New Mart, where the group occupies a 4,800-square-foot space donated by the building’s owner, Joyce Eisenberg Keefer.

In 2004, the city of Los Angeles donated $100,000 to help FBI create jobs, rewarding the organization for successfully creating 200 jobs with its first two $100,000 grants from the city. The Bank of America gave FBI $10,000 to identify ways of assisting the industry with educational and economic development programs. And U.S. Rep. Lucille Roybal-Allard, whose district includes much of downtown Los Angeles and the Fashion District, has earmarked $50,000 for a grant to pay for consultants.

In addition eBay awarded a $40,000 grant to FBI to sponsor a fashion show on Oct. 28 at The Standard Downtown L.A., where many FBI members showcased their creations. Renowned Los Angeles–based fashion designer David Cardona headlined the show. EBay also created the online store for FBI, which features samples and overstock from several Los Angeles designers, including Cardona.

Starting in 2005, California State University, Los Angeles will hold an extensionclass program at FBI’s headquarters focusing on textile production. The first classes will begin in January. —D.B.

Juicy Couture

This year marked Juicy Couture’s 10th anniversary, and the fashion label that infused sexiness into sweats celebrated the big occasion in an unsurprisingly over-the-top style. Not only did Juicy open its first boutique at the Caesars Palace Forum Shops in Las Vegas in November, but its founders, Pamela Skaist-Levy and Gela Taylor, also inspired Barbie dolls that matched them down to their hair color and pet paraphernalia, just in time for the holidays.

Juicy, based in Arleta, Calif., first blew onto the fashion scene with its T-shirts, jeans and velour track suits. It mastered the game of giving clothes to celebrities, including Jennifer Lopez and Mandy Moore, whose Juicyclad images were photographed and published in numerous magazines. The company has branched out to create everything a fashionista needs, from baby clothes and men’s apparel to swimwear and jewelry.

Juicy is now owned by New York’s Liz Claiborne Inc., the multibillion-dollar apparel giant that can help the label expand its glittering empire to encompass perfumes and home furnishings, among other items. Juicy generated about $47 million in sales in 2002 before it was acquired in April 2003. According to Santa Monica, Calif.–based investment bank USBX Advisory Services LLC, Claiborne paid $39 million in cash, plus the assumption of debt, and offered an earn-out provision that would allow Juicy to double the price. Judging by its wheeling and dealing in the past year, Juicy could be well on its way to a brighter future. —K.T.L.T.

Lifestyle Centers

Four years ago, developers started looking for ways to broaden the possibilities of the mall concept. In 2004, one of those possibilities, the lifestyle center, became one of the most popular trends of the new shopping movement.

According to the New York–based International Conference of Shopping Centers, 10 to 20 lifestyle centers should be built in the United States in 2005, while fewer than 10 traditional shopping malls are scheduled to be constructed.

Developers across California announced bold plans for lifestyle centers this year. In October, Los Angeles–based Forest City Commercial Group opened Victoria Gardens, a more than 1 million-square-foot regional lifestyle center, in Rancho Cucamonga, Calif. Caruso Affiliated, developer of The Grove in Los Angeles, announced it will develop six more open-air centers in the state.

While the ascendancy of the lifestyle center is not in question, the exact nature of the new mall is a little hazy, according to Brian Jones, president of Forest City Commercial Group’s West Coast division.

“No one demonstrated what a lifestyle center is,” Jones said. “Clearly, it’s an outdoor configuration with lifestyle uses.”

Typical features include sit-down gourmet restaurants, residential and office space, Main Street–style architecture, and unique tenants such as community theaters. The reasoning behind developing the lifestyle element is not only to get jaded shoppers to return but also to extend their visits beyond the average 82 minutes people spend in malls.

Larry Kosmont, president of Los Angeles–based Lee Kosmont Advisory Services, said lifestyle centers will be very good for the apparel industry.

“They’re not just looking for the standard tenants but for accessories, high style and a bit of uniqueness,” Kosmont said. “They are a broader showcase for the rest of the industry.” —A.A.

Loft Living

The residential renaissance was in full bloom in 2004. Living in downtown Los Angeles has become a cool option for apparel industry workers and others who like to live, work and play in an urban environment.

Developer Tom Gilmore kicked off the trend in the Historic Bank District. Then, developers Mark J. Weinstein of MJW Investments and Steve Needleman of Anjac Fashion Buildings led the way in the Fashion District, opening Santee Court and the Orpheum Lofts. Needleman sold out the Orpheum’s 37 units in a few months, and Weinstein opened the first 165 of 550 units at Santee Court.

In addition to providing new living space, the developments have helped rid downtown of unsightly, vacant buildings. The new lofts have also brought a convenience retail element to the area. Santee Court opened a Rite Aid drug store this fall. And with a Ralphs grocery store on the way, downtown living is becoming more feasible.

“It still has a way to go,” Needleman said. “We’ve established a residential base for downtown. That beginning has taken a strong foothold.”

What surprised many is the amount of money coming into the area. Developers are now spending big money, $50 million to $100 million. The next surge will be for-sale condominiums, said Weinstein, who has a waiting list of 700 potential buyers for 64 units being built at Santee Court. He has another 220 units expected to come online next year.

Denver-based Anschutz Entertainment Group Inc. is adding to the mix with a massive residential/entertainment village near the Staples Center. The project will include new student housing for the nearby Fashion Institute of Design & Merchandising.

Because of this urban residential growth in Los Angeles and in other markets, the adage that downtowns become ghost towns after 5 p.m. is starting to disappear. —R.M.

Ed Mandelbaum and Betsee Isenberg

Los Angeles Market Week has followed behind the international fashion weeks and regional markets for years. Several showroom building owners and representatives have lobbied for earlier dates. This year, Designers & Agents co-founder Ed Mandelbaum and The Bank showroom co-owner Betsee Isenberg spearheaded an effort to move the market dates up. The two say the new dates will make the Los Angeles market more relevant on the international fashion and market week calendar.

The Fall ’05 run of the new market, dubbed the Los Angeles Contemporary Market, will be held March 17–22, a full three weeks before the scheduled Los Angeles market and six weeks after New York Market Week.

“The new dates will help make Los Angeles into an international market,” said Mandelbaum, who added that many overseas buyers are currently looking to the United States because the decline in the dollar has created “advantageous pricing” for international buyers. “I think L.A. and the whole country will have amazing traffic from all over the world.”

The date shift comes after years of lobbying by Mandelbaum and Isenberg, who each wield considerable influence because of the caliber of lines they represent.

Mandelbaum and D&A co-founder Barbara Kramer host their show five times a year in Los Angeles at The New Mart and the Cooper Design Space, as well as in New York and Tokyo.

Isenberg, a longtime New Mart tenant, last year opened The Bank on the building’s ground floor with business partner Kay Sides. The 15,000-square-foot showroom space houses Isenberg’s 10 eleven and Theory showrooms and Hatch, coowned by Isenberg and Sides. Other lines showcased at The Bank are Catherine Malandrino, Diane Von Furstenberg, Joie, Robert Rodriguez, Vince, James Perse, LaCoste, Daryl K, Tree, Michelle Mason, Slab-Rick Owen, Henry Duarte and Chip & Pepper.

Isenberg is enthusiastic about the new dates.

“In my mind, Los Angeles has been an influential international market since the early ’80s, when Los Angeles put innovative fashion on the runway and in the public eye,” she said. “Lines like T.J. Boys, Karl Logan, Leon Max [and] Glenn Williams set the standard for new visionary fashion, and we had the support of the press, the buyers and the international market in a big way. Over the last few years, the international buyers, the press and 7th on Sixth [co-producer of Mercedes- Benz Fashion Week at Smashbox Studios] have all taken an interest in promoting Los Angeles fashion again. It’s not just about retail business.We are back to being innovators of fashion, and everyone is behind the newness of Los Angeles and the West Coast.”

But with Los Angeles at the end of the market week schedule in recent years, buyers had no open-to-buy left and many manufacturers closed production for the season and were unable to fill new orders placed at the Los Angeles market, she noted.

“I think with the new dates, we will follow New York in a timely manner and become a fashion destination,” she said.—Alison A. Nieder

Mercedes-Benz Fashion Week at Smashbox Studios

Mercedes-Benz Fashion Week at Smashbox Studios has become the central event on the Los Angeles Fashion Week calendar and has helped focus an international spotlight on Los Angeles design through its biannual show.

This year, after two seasons of hosting competing events, IMG’s 7th on Sixth, the East Coast group that organizes Olympus Fashion Week at Bryant Park, and Smashbox Studios, the Culver City, Calif.–based commercial photo studio, merged their efforts. Last year, 7th on Sixth held fashion shows at The Standard Downtown L.A. and Smashbox held shows at its studio across town. The commute left the press, buyers and designers feeling exhausted and frustrated. By merging the events, the two groups created a large, glitzy centerpiece to Los Angeles Fashion Week, drawing national and international press, buyers, stylists, celebrities and designers.

Davis Factor, co-owner of Smashbox Studios, said, “I think that the marriage between Smashbox and IMG is really helping to make Los Angeles Fashion Week a success.”

Organizers worked through the initial glitches of the merger, including long valet parking and check-in lines, security issues, and show scheduling.

The runway shows featured top Los Angeles designers, including Richard Tyler, Louis Verdad, Petro Zillia, Rami Kashou, Michelle Mason, Corey Lynn Calter, MartinMartin and Sheri Bodell. The event also became a platform to showcase L.A. style and lifestyle lines such as Da-Nang and 2 B Free, as well as denim lines such as Joe’s Jeans. Other national and international designers—including New York–based Heike Jarick, Toronto-based Arthur Mendonca and Barcelona, Spain–based Custo Barcelona—showed their lines at the event to gain exposure to West Coast buyers and celebrity stylists.

But Mercedes-Benz Fashion Week at Smashbox Studios is not the only event on the fashion week schedule. The week has grown from 30 events in 2002 to 70 in October 2004, including solo designer shows and group shows hosted by Gen Art, the California Market Center, Fashion Business Inc. and P. Ka Bu.

Mercedes-Benz Fashion Week at Smashbox Studios is still evolving and continuing to make improvements. The event has grown in reputation, although it still faces questions regarding the calibre of the lines shown, which currently range from eveningwear to sportswear and denim.

Organizers Fern Mallis, executive director of 7th on Sixth, and Dean and Davis Factor of Smashbox Studios recently decided to move up the dates to coincide with the new Los Angeles Contemporary Market dates. The Fall ’05 runway shows will be held March 16–20, two weeks earlier than last year. Organizers said the new dates will not only help designers showcase their lines at a more viable time to capitalize on sales but also will place Los Angeles Fashion Week closer to the international shows. —N.J.S.

Pool

When Pool show founder Ronda Walker held her first show in Las Vegas in 2002, there were just two satellite shows: one for the misses and plus-size market and one for off-price buyers. Walker’s event showed up-and-coming and off-the-radar contemporary and streetwear lines in a series of hotel rooms in the offbeat Stratosphere hotel. Conventional wisdom held that her niche was already being served at the massive MAGIC International—in alternative venue The Edge and in the wildly popular Streetwear section.

But Walker, already known among contemporary retailers as the owner of the Republica showroom in Los Angeles’ Silverlake district, held firm. Pool has grown from 50 exhibitors to more than 300 companies, which are now showcasing their wares in an 180,000-square-foot space at the Mandalay Bay Resort & Convention Center.

The show has evolved into a lifestyle show featuring young progressive sportswear, footwear, cosmetics, books, music and home accessories for the boutique and specialty store markets. The exhibitor mix ranges from small boutique labels— including Eisbar, Army Pink, Fresh Jive and Howe— to larger contemporary brands such as Fornarina, Miss Sixty and Theory. The product mix and the relaxed open-booth venue attract buyers from key boutiques, including Ron Herman–Fred Segal Melrose and American Rag.

Walker’s formula has also attracted competition. MAGIC organizers have beefed up contemporary offerings, and ENK Shows’ Brighte Companies and the Project Global Trade Show, both based on the East Coast, will host shows in Las Vegas for the first time next year. —A.A.N.

Port Complex of Los Angeles/Long Beach

The ports of Los Angeles and Long Beach are the lifeblood of the apparel and textile trade world.

No one is sure how the elimination of apparel and textile quotas will affect the ports next year. But it is certain that cargo volume at both ports will be up. Already the Port of Long Beach handles 5.5 million 20-foot containers a year, a 20 percent increase over last year, while the Port of Los Angeles handles about 7.2 million, a 2.5 percent increase.

With an influx of goods arriving from overseas earlier than normal this year, the ports were hit with a series of challenges. Ships began to stack up beyond the breakwater in July; sometimes as many as 45 vessels waited four to five days to get their cargo containers unloaded. A shortage of dockworkers and rail cars had a crippling effect.

After much negotiation, the Pacific Maritime Association, which employs the dockside workers, agreed to have the International Longshore andWarehouse Union hire 5,000 more casual workers to help the 10,500 union laborers unload cargo.

To ease congestion, the ports are working to keep the ship terminals open in the evenings and weekends so that truckers can pick up cargo during off hours. The program, called PierPass Inc., is expected to go into effect in March.

Customs inspectors have beefed up their examinations of apparel suspected of not being manufactured in the countries listed on the labels. Janet Labuda, director of U.S. Customs & Border Protection’s textile and apparel enforcement division, has played a key role in determining what inspectors will scrutinize. This year, items such as socks and knit sweaters, suspected of being manufactured in China but labeled as having been made in other countries to avoid quotas, were given extra attention.

Even though apparel and textile quotas among World Trade Organization members will disappear next year, Labuda suspects that safeguard measures, or temporary quotas, will keep her inspectors busy looking for illegally labeled goods.—D.B.

Project Global Trade Show

Project Global Trade Show kicked off the contemporary menswear trend and created a buzz for the category in the industry.

The past year has been filled with excitement for Sam Ben-Avraham and his fledgling show. Thirteen months after kicking off its first trade show in New York, Project migrated to Los Angeles in August to present its streetwear and premium denim offerings. In November, the New York–based company said it will add a third event, next to the Westcoast Exclusive’s menswear show in the Mandalay Bay Resort & Convention Center in Las Vegas.

“The fact that we moved to the West Coast is definitely a big step for us,” said Ben-Avraham, Project’s founder and owner of a 5- month-old showroom in New York. “Everything happening in fashion today is coming out of L.A.”

Project also has gained momentum in the established menswear industry. Ben-Avraham said 600 buyers of traditional menswear came to his third show in New York, compared with none in the first show. While the New York show in January will focus on menswear because of its early dates, about 20 percent of the exhibitors at the Las Vegas show in February will carry womenswear, Ben-Avraham said.

Project’s return to Los Angeles is tentatively scheduled to start on Jan.31, but Ben- Avraham said the decision to put on the show depends on the vendors’ interest.

Ben-Avraham said he expects 65 to 70 companies to participate in the Las Vegas show, including Loomstate, Avalon and Blue Blood, who all have been to previous Project shows but will be making their debut in Sin City.

“They never felt comfortable to do Vegas because the image is bigger,” he said. “Now they decided to come because they feel comfortable with us.” —K.T.L.T.

RFID Technology

Radio frequency identification (RFID) technology has become one of the most controversial and potentially revolutionary technologies to emerge since electronic data interchange (EDI) and bar codes. The technology uses radio waves, transmitted through scanners and tags, to track merchandise throughout the supply chain.

Given the fact that Wal-Mart Stores Inc. and Target Corp. are mandating its top 100 vendors to be RFID-compliant by the new year, RFID could become a reality sooner than most think. Many smaller companies are still in the dark about RFID. Larger companies view it as an expense of doing business because they will have to front the costs for the hardware. Wal-Mart and Target will eventually extend their mandates to all vendors.

Privacy concerns are an issue because RFID can track customer information. But on the upside, retailers see RFID as a revolutionary tool that will define the future of retailing. RFID can eliminate waiting in long checkout lines through “smart shelves” and kiosks that can scan products by the bunch. The technology can also help retailers fight store theft.

Some European retailers—including Metro AG of Duuml;sseldorf, Germany, and Prada of Milan, Italy—are already advancing the concept. Metro has opened a “future store” equipped with RFID tags in Rheinberg, Germany. Managers can at any moment determine how many shopping carts have entered or left the store.

Experts said that although a full-scale RFID rollout will not happen for another 8 to 10 years, it is on its way. RFID implementation will increase by 47 percent this year and the technology will grow to encompass a $2 billion market by 2008, said Framingham, Mass.–based researcher IDC. —R.M.

Tukatech

Ram Sareen, the outspoken chief executive officer of Los Angeles CAD/CAM supplier Tukatech Inc., continued his quest to bring affordable technology to small apparel and textile industry players by initiating several new ventures in 2004.

Earlier this year, Sareen struck an agreement with FedEx Kinko’s Office and Print Services Inc. that will allow U.S.–based apparel companies and free-lancers to wire garment patterns overseas through Tukatech’s Web site and have plots (digital printed patterns) processed and delivered to overseas contractors in a matter of hours. The service is aimed at improving speed-to-market and eliminating up to one week from the production cycle.

This is not Tukatech’s first venture into corporate culture; Sareen has done it before with Nike Inc. and Kohl’s Corp.

Under Sareen, Tukatech acquired Indian software company Logicsoft, which is helping develop the TukaCad.Net suite, a CAD program that includes textile design capabilities. Sareen also engineered the launch of TukaForms, a dress-forms division that markets laser-scanned body forms made from materials that replicate the feel of human flesh. The idea is to improve fit and increase speed-to-market.

Sareen’s wife, Eva, also helped the company gain ground in the 3-D arena by developing Tukatech’s E-Fit Simulator, a 3-D tool that uses motion technology to test how garments react to movement during the prototype stages. —R.M.

Wal-Mart Stores

When Wal-Mart Stores Inc. announced in early 2004 that it would open 40 of its Supercenters in California, the company stepped into a maelstrom of political controversy that caught the Bentonville, Ark.–based retail giant by surprise, said Jack Kyser, chief economist for the Los Angeles County Economic Development Corp. “They’ve never encountered this much opposition,” Kyser said.

More than eight local governments spanning Northern and Southern California held emotional debates on restricting—and in some cases barring from city limits—the 200,000-square-foot Supercenters, which sell groceries, clothes, toys and other goods. At issue was whether, as Wal-Mart’s opponents espoused, the Supercenters would drive smaller groceries out of business and force down the wages of supermarket employees. Wal-Mart executives argued that the Supercenters would give consumers more choices.

The world’s largest retailer countered the political fire by jumping into the public arena. In April, the company and consumers from Inglewood, Calif., put a measure on a municipal ballot challenging a city law restricting Supercenter growth. They lost.

In June, the Los Angeles City Council approved a unique measure to guide development of Supercenter-like stores in the city’s economic assistance zones. The law said that any retailer coming into those areas with the intention of building a store 100,000 square feet or larger and with 10 percent of floor space dedicated to the sales of groceries would be required to fund a study on how their proposed store would affect local businesses and salaries.

Since Wal-Mart’s political setbacks, media attention has shifted to the retailer’s increasingly soft sales performance.

As of December 2004, only three Supercenters have been built in California. One opened in the city of La Quinta in March, and two more opened in Stockton and Hemet in October.

The fate of the other 37 Supercenters is hazy. Wal-Mart spokesperson Peter Kanelos said that the company is still on track to build them but gave no date for the completion of the rollout. —A.A.

Sue Wong

In a career spanning nearly four decades, 2004 was highlighted by steady growth and record revenue for Sue Wong.

Following her October show at Mercedes-Benz Fashion Week at Smashbox Studios in Culver City, Calif., Wong said she received her first $1 million-plus order from The Neiman Marcus Group Inc., which has been calling every week for reorders. She also wrote $1 million in orders at New York’s Fashion Coterie. Macy’s, a unit of Federated Department Stores Inc., recently doubled its open-to-buy for her company, Wong said. And, for Fall 2004, she introduced her shoe collection, manufactured by the Omni Footwear Group.

In 2004, Wong tallied $40 million in revenue, a twentyfold increase from what she had totaled in 1998.

While her business has soared, her roots are still firmly planted in the vintage sensibility that she tapped decades ago when she bought used clothes by the pound and reworked them. She launched her own business 19 years ago. In 1998, she opened a showroom and hired Joanie Graham to spearhead sales. A year later, Wong visited three dress factories in China and designed 20 gowns on the spot. Sue Wong Nocturne, her collection of bias-cut gowns and embellished eveningwear, was born. Her other line is Sue Wong Collection, a younger, trendier set of daytime dresses.

Wong, who immigrated to the United States from China when she was 6, said she ships new products every month. She manufactures her clothes solely in China, where she said she benefits from low production costs and the highly skilled workers who create her dresses’ detailed handwork. She produces 250 styles a season, five times a year.

Wong understands the importance of glitz and glamour in the fashion business; up-and-coming stars wear her dresses, and she hired a flamenco singer to perform at her recent runway event, which was broadcast in countries as far away as Argentina, Spain and China.

But Wong established her success on a basic premise: “You have to have a real business,” she said. —K.T.L.T.

Robert Zoellick, U.S. Trade Representative

When Robert Zoellick took office on Feb. 7, 2001, as the U.S. trade representative, the United States had free-trade agreements with only three countries: Canada, Mexico and Israel. Now freetrade accords have been negotiated with 15 countries, and trade talks are going on with 12 more.

Zoellick, a member of President Bush’s cabinet, helped usher China into the World Trade Organization, setting the stage for the Asian giant to become the primary overseas apparel provider to the United States. When apparel and textile quotas are eliminated on Jan. 1, 2005, China is expected to capture as much as 50 percent of the U.S. apparel market.

The elimination of quotas among WTO members next year is one of the most dramatic events affecting the U.S. apparel and textile industry, prompting U.S. manufacturers to lobby the Bush administration to keep some apparel and textile quotas next year.

Zoellick is a diehard believer in free commerce. During his days at the U.S. State Department, Zoellick said he believed that no developing country could climb out of poverty without opening its market.

With that in mind, the trade representative early this year negotiated the Central American Free Trade Agreement, which promotes free trade among five Central American countries and the United States. He also negotiated a free-trade agreement with the Dominican Republic and Bahrain. President Bush has signed those agreements, but they are still awaiting approval by Congress.

Also this year, Zoellick concluded freetrade agreements with Chile and Singapore. Now the Harvard graduate is setting his sites on other areas.

In October, Zoellick was in Oman and the United Arab Emirates to discuss free-trade accords. In early December, he traveled to the African countries of Senegal, Mali and Benin to talk about liberalizing free trade with those countries.

He also wants to establish the Free Trade Area of the Americas, a free-trade zone stretching from Alaska to Argentina. —D.B.