Expect to see improvements for local retailers and apparel manufacturers next year, according to the 2015 Forecast by Chapman University’s A. Gary Anderson Center for Economic Research. Taxable retail sales are expected to reach nearly $457.4 billion statewide, up 6.1% from this year’s estimated total. The apparel industry is expected to account for a roughly $39.7 billion share of the total, a 7.5% increase over a year ago.
The nationwide outlook also appears promising—U.S. apparel and footwear companies’ operating income is “set to accelerate in 2015” as they begin to reap the benefits of ramped-up online operations and investments in direct-to-consumer sales, according to a report by Moody’s Investors.
Look to see what Altamont Capital Partners in Palo Alto has in store for Fox Head Inc. after acquiring a majority stake in the Irvine-based label. Altamont also acquired Hood River, Ore.-based Dakine and Mervin Manufacturing Inc. in Seattle last year. It also had an unsuccessful run at Billabong International in 2013.
Person to Watch
Edmond Thomas
All eyes are on Edmond Thomas, who returned to Foothill Ranch-based Wet Seal Inc. in September to replace John Goodman in the chief executive role and help the ailing apparel retailer cut costs and find a potential buyer.
Thomas served in the same positive from 2007 to 2011 and as president and chief operating officer from 1992 to 2000.
But time may not be his side on this go-around. Wet Seal said it might seek bankruptcy protection if it can’t address its immediate liquidity needs. The company’s third-quarter financial report showed a bigger-than-expected loss of $36 million and $104.3 million in revenue. Its market value was about $4.6 million last week and its share price 5 cents, down from $2.50 per share and a market value of about $213.6 million a year ago.
Thomas’ operating strategies—should an investment or a buyer surface—include repositioning the company’s merchandise assortment, with a “greater emphasis on fashion products” instead of basics, and strengthening the marketing program. He’s also betting on driving growth on the e-commerce side of the business.
Company to Watch
Volcom Inc.
Volcom went through an image makeover this past summer, trading its “anti-establishment” sentiment for a more unifying brand identity, with a “True to This” tagline.
The marketing push appears to be working for the Costa Mesa-based actions-sports apparel manufacturer. Parent, fashion house Kering in Paris, in its third-quarter financial report attributed “positive sales trends at Volcom” to “successful repositioning [of the brand].” Volcom and Electric Visuals in San Clemente combined for $92 million in sales for the quarter, up 5% from the year-earlier period.
Volcom also got a recent boost from Kelly Slater, as if being part of a roster that includes luxury labels such as Bottega Veneta and Balenciaga wasn’t enough.
The former Quiksilver Inc. surf team rider said he will endorse surf products for Volcom as he also backs his own clothing label, Outerknown in Los Angeles.
