California Apparel News

After a rough 2008 holiday season, retail executives plotted their companies’ comebacks at the 11th annual ICR Xchange investors conference, held Jan. 14–15 at the palatial St. Regis Monarch Beach Resort in Dana Point, Calif.

Keeping inventories low and embracing new retail technologies such as improved point-of-sale systems seemed to be required strategies for all retailers presenting at the investors conference. Yet as J.Crew Group Inc. Chairman Millard “Mickey” Drexler said, nothing is going to be easy in 2009. “You’re going to see a lot of people getting weaker,” he said.Pacific Sunwear

Anaheim, Calif.–based specialty retail chain Pacific Sunwear has long been the go-to place for surf and skate fashions at the mall. With its current fleet of 937 stores, it slogged through a tough holiday season, which ended with a same-store-sales decline of 10 percent for the month of December. But PacSun Chief Executive Sally Frame Kasaks outlined a few initiatives at ICR Xchange to return PacSun to its former prominence.

Some parts of the road back to success will be paved with private label. Kasaks promised to increase sales for PacSun’s proprietary brands, such as its private-label brands Bullhead and Kirra, in 2009.

Another way to attract more people into the stores is to offer new looks. Later in 2009, consumers also will be seeing more up-and-coming surf and skate labels and lines previously not carried at PacSun. One such brand is RVCA, the Costa Mesa, Calif.–based line with a fervent cult following. According to Kasaks, RVCA T-shirts will eventually be sold at 550 PacSun stores, and 40 of those stores might sell a wider array of the RVCA collection. Until recently, PacSun had relied on selling the most dominant surf and skate labels, such as Quiksilver and Billabong.

During the presentation, Kasaks conceded some mistakes on the part of PacSun executives. “[We] left money on the table by exiting accessories too quickly,” she noted during her presentation.Wet Seal

Wet Seal Inc.’s glory year was 2001, when its annual same-store sales for its Wet Seal and Arden B. divisions increased 7.8 percent over the previous year. Since then, business for the retailer of contemporary and juniors fashions has followed a volcanic trajectory. It rallied after nearly filing for bankruptcy in 2004. However, the 2008 holiday season was rough for the retailer, which is based in Foothill Ranch, Calif. In December, its Wet Seal division posted a same-store sales decline of 6.6 percent. Its Arden B. division posted a steep decline of 36.9 percent.

During his ICR presentation, Wet Seal Chief Executive Ed Thomas said a glimpse of the future of the Wet Seal division could be seen in its new prototype store, which debuted in September at the Irvine Spectrum retail center in Irvine, Calif. Thomas said the prototype’s most notable break from the past is its Girl’s Room mini-boutique, which specializes in accessories such as candles, books and other gifts. He plans to build Girl’s Room sections in more than 100 Wet Seal stores in 2009. The company also plans to introduce more private-label assortments and relaunch its Blue Asphalt denim line this year.

Thomas spoke briefly about plans to revive Arden B. He said the suffering contemporary division began a program of instituting lower price points and improved merchandise planning.True Religion

True Religion is one of the few companies expecting expansion in 2009, according to Michael Buckley, chief executive of the Los Angeles–based premium denim brand. He forecast opening more than 20 new stores each year in the United States. Upcoming locations for True Religion stores are in Seattle; Scottsdale, Ariz.; and Orlando, Fla. However, the brand is prospecting bigger opportunities in Japan. In 2008, True Religion ended its relationship with its former Japanese distributor and built a company headquarters in Japan. Part of its mission is to open boutiques in Japan, and by the end of 2010, the company expects to open eight to 10 free-standing True Religion stores in that country. Buckley also forecast growth in licenses for True Religion such as hats and footwear. The company said its estimated annual revenue for 2008 was $265 million. In 2007, its revenue was $173 million.Hot Topic

Hot Topic was one of the few retailers to report positive same-store sales during the 2008 holiday season. It’s a remarkable comeback story because the City of Industry, Calif.–based company posted more than four years, or 17 quarters, of declining same-store sales. During her ICR Xchange presentation, Hot Topic Chief Executive Betsy McLaughlin credited the comeback to teen frenzy over the hit romantic vampire film “Twilight.” Hot Topic was one of the only retailers to have a wide array of “Twilight” merchandise. “Twilight” cast members helped promote the merchandise with appearances at selected Hot Topics. “It was the Beatles unleashed,” McLaughlin said of the fan hysteria. One appearance at a San Francisco Hot Topic was cancelled because of unruly crowds.

McLaughlin believes the “Twilight” business will continue because there will be “Twilight” sequels. She also sees the film’s popularity as a unique chance to spread the word on her company. The main mission of Hot Topic executives is to figure out how to turn occasional customers into frequent shoppers. Part of the plan is to remodel Hot Topic locations and make them unique places for new music. Bands will make appearances at selected Hot Topics, for example. In October, Hot Topic debuted new music e-commerce and social networking Web site ShockHound (www.shockhound.com). McLaughlin said she hopes the Web site will eventually increase traffic into bricks-and-mortar Hot Topic stores.American Apparel

American Apparel, the renegade basics manufacturer and retailer, reported good same-store sales during the bleak holiday season. In October, American Apparel’s same-store sales for its branded boutiques around the world were up 22 percent over the same time in the previous year. For November, its global comparable same-store sales were up 6 percent. In December, global same-store sales were up 3 percent over the same time in the previous year.

American Apparel Chief Financial Executive Adrian Kowalewski credited the Los Angeles–based company’s health to serving a demographic not crippled by the weak economy: 20- to 32-year-olds with disposable incomes who are unencumbered by mortgages and car payments. The basics company said it hopes to appeal to people beyond this demographic in the future. It also plans to build more stores and complete construction of 14 stores left unfinished in 2008.