MAGIC, WWDMAGIC Find Good Sales in Bad Times

Sam and Dimple Bajaj manufacture fashion with a risqueacute;, Goth edge at their Dead Threads label, based in Austin, Texas, but they did not expect their bright styles to make much of a splash at the most recent MAGIC Marketplace, which included MAGIC Man, WWDMAGIC, S.L.A.T.E. at MAGIC, Ecollection, Premium at MAGIC and Premium at WWDMAGIC, and MAGICKids at the Las Vegas Convention Center.

The weak economy and new layout of the trade show had this husband-and-wife team forecasting sales would plummet 50 percent compared with their sales at MAGIC last February. However, by the last day of the most recent show, they said their initial forecast was proven wrong when their sales broke even. Better yet, they estimated they spread the word about Dead Threads to 30 percent more buyers than they had during the same show in the previous year.

This happy reversal of fortune was credited to retailers needing to restock their shelves and to the show’s new layout. But the Bajajes’ good feelings were tempered by the feeling that retailers were buying less than in previous seasons. “Many were buying, but they were buying with more caution,” Sam Bajaj said. “Normally they would buy a whole season at once. Now they are buying month to month.”

Many retailers were interested in ordering wholesale with an immediate delivery, yet a significant number reportedly made typical orders for the Fall season. However, every retailer was forced to be mindful of a new customer price resistance, according to Lane Saunders, a partner in Costa Mesa, Calif.–based boutique chain The Closet.

Before November 2008, many of his customers would not have raised an eyebrow at spending $250 on a pair of jeans, Saunders said. Since then, he has noted a price resistance to jeans priced above $180.

“The premium bubble has burst,” he said.

Other retailers said the most recent MAGIC could have been nicknamed “Let’s Make a Deal.” Diane Merrick runs a popular self-named contemporary boutique in Los Angeles. She said some vendors were offering 30-net and 60-net deals to premier boutiques or delayed-payment arrangements where the retailer would not have to pay for orders until 30 to 60 days after the delivery. Others were offering consignment-style deals.

“I never knew anyone to make deals before,” Merrick said. On the other hand, vendors have been warier of retailers’ ability to pay. Designer Deborah Lindquist, who showed this season at MAGIC’s Ecollection section, said she typically takes payments from retailers with credit cards. Since mid-2008, she has avoided compensation by checks and cash-on-delivery for payments.

Merrick was unhappy with the merchandise mix, however, saying there were few fresh styles. But Barbara Fields, who analyzes juniors fashions for her Los Angeles–based Barbara Fields Buying Office, found several key trends among the juniors vendors at WWDMAGIC. She said Fall 2009 juniors trends will gravitate toward peace-sign graphics, T-shirts with sublimation treatments and pyramid-shaped studs.

Rockabilly 1950s-style dresses continued to be en vogue at the WWDMAGIC booth for Los Angeles label Stop Staring! Designer and founder Alicia Estrada estimated her sales increased 10 percent compared with last February’s MAGIC show, mostly because of repeat buyers. Traffic at the Stop Staring! booth may have also been the result of the fewer exhibitors at the show, she said.

Still, there were plenty of retailers in attendance. Buyers from Zappos, Belk and Nordstrom passed through the new Premium at MAGIC section, said Amit Datwani, president of premium label L’Uomo Indigo, which offers finely tailored shirts intended to be worn with jeans. The show also featured a mini-show of mostly British labels making their American debut. One of them was from designer Mark Powell, who makes stylish 1930s-inspired suits for his London-based Mark Powell Bespoke Tailor label. He gave his approval to the American show, but he said it would take a couple of seasons before his new brand could make an impact. “It’s mostly people viewing the suits now,” he said. —Andrew Asch