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Soaring energy costs, a downturn in housing and rising fears of global recession all signal tougher times ahead for the economy as a whole. Yet as one expert says optimistically, “When the dollars get tight, the tight get accessories.” Moreover, the economy offers an increasing certainty that while unfavorable for U.S. consumers, the reduced American dollar value will continue to lure foreign shoppers to major cities. And manufacturers will likely see rising export sales as well.
Undoubtedly, the year ahead holds many challenges. For starters, the profitable luxury handbag sector is now overcrowded. And department store consolidations continue to demand the most astute retail strategies for both manufacturers and specialty stores. (“Fifteen years ago, you could survive if you were mediocre,” says one expert. “Not anymore.”) Yet our select panel of investment bankers, fashion trend forecasters and market researchers finds reasons for optimism in the accessories marketplace. They include: Eric M. Beder, senior vice president, Brean Murray, Carret & Co.; Howard Davidowitz, chairman, Davidowitz & Associates; Jillian Hertzman, trend analyst & research consultant, The Intelligence Group; Howard Feller, partner, MMG/Marketing Management Group; Marshal Cohen, chief industry analyst, The NPD Group; Pam Danziger, owner & founder, Unity Marketing; and Candace Corlett, partner, WSL Strategic Retail.
Just as last year was mostly positive for the accessories industry, the 2008 forecast also looks favorable, mainly because of a single driving force: “Fashion,” says the NPD Group’s Marshal Cohen.
“It’s now more important than ever to consumers—and accessories have become the focal point. Consumers have demonstrated a whole new dimension in their love of accessories, as well as a new willingness to ‘invest’ in pieces that update their wardrobes.” The most growth has occured at the upper and moderate tiers, say experts—with brands and stores clamoring to add better merchandise. The lower part of the market, however, was hit hardest as consumers traded gift money for gas money. A recent WSL Strategic Retail survey of nearly 1,500 consumers showed that 43 percent of female respondents would reduce personal spending; of that total, 73 percent said they’d cut back on fashion accessories specifically. Meanwhile, rising overseas production costs often resulted in less appealing, “cheap looking” merchandise at the lower tier.
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