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8 CALIFORNIA APPAREL NEWS August 5–11, 2011 REtAIL FOCuS Velvet Brigade to Mix Commerce With Contest With public obsessions over both fashion reality shows and social media showing little sign of waning, two former Macy’s buyers decided to mix the two in a new start-up ecommerce business. Founded by Lindsay McConnon and Jena Wang, San Francisco–based Velvet Brigade is still in beta mode. The site launched in May and is debuting its e-commerce function the week of Aug. 8. However, McConnon, the site’s chief executive, said the website has already been embraced across the grass-roots fashion world because of its reality show/contest-like format. Here’s how the site works: New designers are encouraged to submit a contemporary design. Then the novice designers have 30 days to campaign or market for votes on Velvet Brigade’s site, its Facebook page or its other profiles on all of the other media sites out there. Whoever gets the most votes during a 30-day time span will see his or her design manufactured by a factory working with Velvet Brigade. (McConnon and Wang have lined up a FASHION COMMANDANTS: Lindsay McConnon and Jena Wang have started the crowd-sourcing fashion website Velvet Brigade. Above right, the Napa Loving dress, designed by Yvonne Wang, was one of the first round of winners on Velvet Brigade. few Northern California factories to help produce the topranked designs.) The winning designs will be sold on the site, and the winning designers will receive 5 percent of sales as well as have their names on the piece’s label. “We’re launching a contemporary brand, and we’re using the grass roots to do it,” McConnon said. However, Velvet Brigade will not be a free-for-all. To be considered for competition, designs must adhere to guides on the website’s trend board, which is changed every season. A designer cannot submit plans for a bikini during winter and expect to be placed in the competition. Like fast fashion, Velvet Brigade pieces will be manufactured quickly after being selected from the site. Also, for votes to be counted, voters must submit their ballots on the Velvet Brigade site. Velvet Brigade’s business plan is similar to Threadless, a Chicago-based e-commerce T-shirt company that, for the past decade, has invited the public to submit graphics for T-shirts. Popular graphics are selected by Threadless’ audience, and the graphic is sold on Threadless’ site and its physical boutique in Chicago. Eventually, McConnon and Wang will seek to sell Velvet Brigade fashions at bricks-and-mortar retailers. Retail price points for clothes sold on the site will range from $120 to $150. Ultimately, McConnon describes the clothes her site will sell as “affordable contemporary.” “[Designers] will market to their friends, but if their friends cannot afford to buy them, we failed somehow,” McConnon said.—Andrew Asch Retail Equation’s Science to Stop Fraud Retail Equation’s Verify-2 application uses a set of mathematical steps and algorithms to fight return fraud. The product could help retailers control return fraud, which costs retailers billions of dollars annually, according to Retail Equation Chief Executive Officer Mark Hammond. “Not only do Verify-2 and our other solutions create an improved overall customer experience, but we also have seen return rates decline and net sales increase amongst our retail clients,” he said. Retail Equation’s Verify-2 system uses mathematical modeling that promises to estimate, with high accuracy, the probability of a return being legitimate or fraudulent. The modeling’s mix of analytics and data-mining computing can flag unusual behavior in returns and can help identify frauds, according to company literature. The Irvine, Calif.–based company—whose client list includes Limited Brands, JCPenney and Nike—recently announced that its Verify-2 application had successfully passed a batch of tests at the Motorola Solutions Center, operated by communications company Motorola Solutions. Verify-2 was approved to work on products such as the Motorola Symbol DS6700 1D/2D Image Scanner, a handheld digital image scanner that can read information such as barcodes.—A.A.
etail sales July Sales Solid $Sales Broiling heat across much of America drove many consumers to air-conditioned malls in July, and the bigger crowds helped make July a solid month for sales, according to the International Council of Shopping Centers. Chain-store sales increased by 4.6 percent compared with last year. The performance should bode well for Backto-School, according to Michael P. Niemira, chief economist for the ICSC. “Even with higher prices from gasoline, apparel and food having inflated the reported sales growth by approximately 2 percentage points, July’s sales performance was still quite solid.” During July, online sales increased 14 percent compared with last year, according to market report MasterCard Advisors Spending Pulse. Luxury sales grew 11.6 percent in a yearover-year basis. Sales for specialty apparel increased 6.2 percent compared with last year. While retailers across the board reported positive same-store sales, Adrienne Tennant, an analyst and managing director of financialservices firm Janney Capital Markets, wrote that July comps were disappointing. My Best Fit Targets California With new investment from Northwater Capital Intellectual Property Fund, Unique Solutions Design Ltd. confirmed it will build more of the My Best Fit body-scanner kiosks, and at least three of them will be located in California, according to Tanya Shaw, chief executive of Unique Solutions. Unique Solutions recently announced that it had received the first C portion of a $30 million investment M from Toronto-based Northwater. It Y will use the investment to build 40 kiosk locations in malls across CM North America this year. Locations MY are being scouted in Los Angeles, San Francisco and Orange County. CY The company plans to have 300 kiosks nationwide by 2013. K Nova Scotia–based Unique Solutions introduced My Best Fit at the King of Prussia Mall, near Philadelphia, in September. Using millimeter-wave technology—the same kind used in airport security screenings—the kiosks map out a consumer’s measurements and then recommends clothes and brands that would best fit the consumer’s body. “Our technology has been a benefit to shoppers because it cuts out the guesswork in finding their right size,” Shaw said. Approximately 40 brands participate in the My Best fit system, including Gap, Old Navy, Banana Republic, Talbots, Levi’s, Guess?, Brooks Brothers, Not Your Daughter’s Jeans and DKNY. Shaw hopes that more than 200 brands will eventually participate in the My Best Fit system. Consumers use the kiosks for free. Brands pay when the kiosk recommends their brand. The kiosk also compiles consumer research, which it sells.—A.A. CMY “Late July slowed materially, “she wrote in an Aug. 4 research note. Consumers were seeking “wear-now” clothes to help them beat the heat, just at the time when stores were setting up their Back-to-School and Fall merchandise. Along with these missed opportunities to sell more summer clothes, she wrote in an Aug. 2 note, retailers were offering deep discounts well before Labor Day, when deep discounts are typically offered. During the last weekend of July, Chico’s began running “buy one, get one 50 percent off” promotions on merchandise throughout stores during that weekend. Abercrombie & Fitch was offering 50 percent off on its denim. Curvexpo.pdf 1 11-08-04 20:21 Despite mixed reviews of the mac- REtAIL FOCuS roeconomic scene, retailers across the board—including Ross, Macy’s and Target—reported their July sales results exceeded expectations or ended up ranking at the high end of their original forecasts. In July, Hot Topic reported its most robust same-store-sales numbers in years. The City of Industry, Calif.– based retailer reported same-store sales of 7.3 percent, and the boost was influenced by the pop-culture retailer being a go-to place for merchandise from the blockbuster movie “Harry Potter and the Deathly Hallows.” For August’s retail sales, the ICSC forecasts an increase of 4 percent to 5 percent.—Andrew Asch July Retail Sales % Change Same-store (in millions) from yr. ago sales % change DISCOUNTERS Target OFF-PRICERS $4,840.00 +5.6 % +4.1% Ross Stores $635.00 +11.0% +7.0% TJX $1,600.00 +8.0 +4.0% DEPARTMENT STORES Dillard’s $425.00 +8.0% +9.0% JCPenney $1,173.00 +1.0% +3.3% Kohl’s $1,122.00 -2.9% -4.6% Macy’s $1,612.00 +5.7% +5.0% Neiman Marcus $244.00 +7.9% +7.7% Nordstrom $993.00 +11.5% +6.6% Saks SPECIALTY STORES $191.00 +13.8% +15.6% The Buckle $64.7 +9.4% +6.8% Gap $949.00 0% -5.0% Hot Topic $50.90 +5.5% +7.3% Wet Seal $46.40 +12.9% +7.4% Zumiez $38.70 +12.3% +4.9% Information from company reports August 5–11, 2011 CALIFORNIA APPAREL NEWS 9
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