NEWSPAPER 2ND CLASS $2.99 VOLUME 71, NUMBER 8 FEBRUARY 13–19, 2015 THE VOICE OF THE INDUSTRY FOR 70 YEARS RETAILER PROFILE Designer Looks: What’s Next for Elyse Walker By Andrew Asch Retail Editor Retailers do business in a world where every sale counts, but since Elyse Walker started her self-named bou- tique more than 15 years ago, she tried to take a different sales angle. A visit to the Elyse Walker shop, a five-minute drive from the beach in Los Angeles’ exclusive Pacific Palisades neighborhood, feels like a high-end fashion get-together where women talk about style and catch up under the hip paintings of the street artist Retna. At the store, Walker plays the gracious host, a friend … and someone who would very much like to dress all of her clients, whether they live a few blocks away in a multi- million-dollar home overlooking the Pacific Ocean or in a loft in Manhattan’s trendy West Village. But there is no ➥ Elyse Walker page 34 TRADE SHOW REPORT Milano Unica Celebrates 10 Years, Turns Its Eye to New York for July Show Los Angeles–based designer Maggie Barry was one of 11 international designers featured in Digital Couture, an event organized by print technology company Epson on the eve of New York Fashion Week. For more from the event, see page 10. By Alison A. Nieder Executive Editor MILAN, Italy—Milano Unica, the European textile trade show formed when several well-established Italian trade shows—including IdeaBiella, Moda In and Shirt Av- Bungalow Clothing Gets Funding by Mixing enue—joined forces 10 years ago, is preparing to launch its first New York show in July. The trade show took its showcase of Italian fabrics and trim to Shanghai in 2013, when it began exhibiting at the E-commerce With Old-School Retail giant Intertextile Shanghai trade show. It has yet to be de- termined whether the Milano Unica show in New York will By Andrew Asch Retail Editor scribed by a computer screen? be an independent show or in partnership with an existing The executives of online shopping site Bungalow Cloth- Bungalow’s different angle on e-commerce recently trade show. ing believe there is a new way of building an e-commerce caught the attention of some high-level tech people includ- ➥ Milano Unica page 28 business, and it means taking a page from one of the oldest ing Tony Hsieh, founder of Zappos.com. Hsieh’s Vegas Tech playbooks in retail. Fund participated in a round of funding that raised around The classic retail strategy is the trunk show. It also has $1.5 million. INSIDE: SM been called the Avon Lady party or the Tupperware party. After Vegas Tech invested in Bungalow—which sells high- Where fashion gets down to business According to Rob Wright, the Los Angeles–based co-founder end contemporary brands such as Iro, Paige, Haute Hippie, and chief executive officer of Bungalow, these gatherings are Halston, Ella Moss and Rails Clothing from its Las Vegas the best way to find the customers that contemporary retailers headquarters—Bungalow’s sales force increased from about love—the ones who have the means and the interest in spend- five people to about 20. Wright forecasted the sales team will ing a lot of money on clothes. eventually grow to 100 nationally and internationally. Bungalow’s unique business model will also answer a The company will eventually look for another growth question as old as e-commerce, Wright said. How do you round of venture funding. 8 22 inject a lively boutique experience into something circum- ➥ Bungalow page 32 Port congestion update ... p. 2 INDUSTRY FOCUS: FINANCE FIDM costume exhibit ... p. 6 Supply Chain ... p. 14, 20 Factoring in the Age of Start-up Apparel Companies and E-commerce Made in America ... p. 16 Denim Trends ... p. 26 By Deborah Belgum Senior Editor place retail? Will bricks-and-mortar stores end up just being Resource Guides ... p. 39 The retail realm as we know it is being turned upside down showrooms? by a growing proliferation of e-commerce sites that are acting All this makes for a brave new world for the factoring www.apparelnews.net as the new Main Street store. community, which is financing these endeavors. Supplying these new websites are a proliferation of start- California Apparel News recently spoke with some fi- up apparel and footwear brands that just might skip selling nance-industry executives to find out how their companies to a traditional store or, then again, hedge their bets and sell approach financing new businesses and how selling to e- online and offline. tailers differs from selling to a bricks-and-mortar retailer. Everyone is trying to figure it all out. Will online sites re- ➥ Finance page 36 01,28,30,32,34.cover.indd 1 2/12/15 9:37 PM NEWS Troubles Pile Up at West Coast Ports After a week’s hiatus, longshore workers Yard, gate and rail operations to move crowds of ships loitering off the coast of and their employers returned to the negotiat- cargo containers off the docks were to con- Mexico and more drifting beyond Oakland, ing table on Feb. 12 while West Coast port tinue at the terminal operators’ discretion. Calif., to delay their arrival. “The logic is operations were bogged down in cargo con- While the employers complained of a to drift out here with the generator going to tainers. work slowdown, the longshore union blamed save fuel or sit at anchor with the generator Not helping the port congestion was an the shippers for using bigger ships that make going,” he said. announcement by the Pacific Maritime As- it difficult to unload huge amounts of con- This is the second shutdown of the ports sociation—made up of the shipping lines tainers at one time. They also cited a short- in a week. The PMA announced a similar and port terminal operators who employ the age of wheeled chassis to transport the cargo closure for Feb. 7–8, saying it made no sense workers—that it would suspend vessel op- containers. to pay extra wages for less work. erations at the ports for four days because of Meanwhile, cargo containers were piled The PMA has been negotiating with the work slowdowns. Closures were announced high on the docks and cargo-container ships International Longshore and Warehouse for Feb. 12, Lincoln’s Birthday, the weekend were waiting for a place to park in various Union since mid-May over a new five-year of Feb. 14–15, and Feb. 16, Presidents’ Day. ports along the West Coast. On Feb. 12, contract to replace the one that expired on The employers have complained that there were 14 cargo-container vessels an- July 1. the union is not sending enough qualified chored beyond the Long Beach/Los Ange- In frustration over the long, drawn-out crane operators to clear cargo off the docks. les port complex breakwater, waiting for a process, Jim McKenna, the PMA’s chief ex- $88,000. Sections covering chassis mainte- “Weekend and holiday pay rates command a berth. That is down from the all-time high of ecutive, called a press conference on Feb. 4 nance and free healthcare have already been premium of at least 50 percent of the basic 20 vessels seen on Jan. 24, Feb. 3 and Feb. to outline the contract terms the employers ironed out, he noted. longshore wage rate. As a result, working 7–8, according to the Marine Exchange were offering. However, the ILWU was not accepting hours on those days would be paid at be- of Southern California, which tracks ship He said the PMA wanted to raise work- those proposals. The union hasn’t specified tween $54 and $75 per hour for longshore movements in the area. ers’ base rate of pay from $35.68 an hour what kind of wage hike and pension benefits workers and clerks and between $77 and “It is looking busy out there,” said Capt. to $40.68 an hour after five years. The em- it would like for the contract, which cov- $92 for foremen,” the PMA said in a press Kip Louttit, the Marine Exchange’s ex- ployers also agreed to increase the maxi- ers nearly 20,000 workers at 29 West Coast release. ecutive director. His maps show there are mum pension from nearly $80,000 a year to ports.—Deborah Belgum NRF Forecasts a Strong 2015, but January Results Mixed Retail sales will increase by 4.1 percent gained some real traction, and after a some- need to keep an eye on, like global economic forecasts, January’s business seemed mixed for the 2015 year, according to a forecast re- what turbulent 2014, we expect to see con- growth, energy prices and even inflation.” according to the U.S. Commerce Depart- leased on Feb. 12 by National Retail Fed- tinued gains in economic activity in the Also supporting this relatively sunny ment. Overall retail sales dipped 0.8 percent, eration, the Washington, D.C.–based retail year ahead,” Kleinhenz said. “While Ameri- forecast, Kleinhenz said that growth in the the department announced on Feb. 12. trade group. cans are benefiting from a pickup in wages labor market should add between 220,000 However, the year started on a good note, Business will be better compared with and jobs and gains in the U.S. stock mar- to 230,000 new jobs each month. Also, the according to Adrienne Yih-Tennant, an ana- 2014, when retail sales for the year increased ket, economic slack has been reduced.