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Benjamin Spillman

Talk is cheap, but togs aren't

14 February 2008

LAS VEGAS, Nevada -- More so than New York's Fashion Week, the clothing shows of Las Vegas are considered a harbinger of what's coming to retail racks.

If the long faces in the Las Vegas Convention Center for Men's Apparel Guild in California, one of the clothing industry's most influential events, are any guide, the business is entering a grueling stretch.

There's nothing wrong with the clothes. Asian manufacturing and the proliferation of fashion sensibility online and on national television mean more people than ever have access to quality products.

The problem is that consumers aren't buying.

Buyers and sellers at MAGIC say they are cutting back on purchasing, travel and staffing to weather the recession many believe is bedeviling the economy.

"We just don't have enough orders to cover our costs and our expenses," said Mousa Ahdout, owner of Bialik International, a Los Angeles-based designer and manufacturer of linen suits.

Ahdout and his son, Shervin Ahdout, worked a booth fronted by a blue suit with yellow stitching in the jacket that retails for $150 to $350. Another chocolate-colored suit with white stripes hung behind the two men, along with the rest of a product line laid out to appeal to retailers who would order them for sale in stores.

Although the suits are competitively priced, the younger Ahdout said the line isn't selling well because cost-conscious customers are cutting back to basics.

"It is not something like a power suit that (retailers) could sell on a regular basis," he said.

MAGIC is a twice-annual event. The August show attracted about 4,000 exhibitors showing 5,000 brands to about 120,000 attendees from 80 countries. It is the largest of several fashion-themed shows in Las Vegas this week.

The shows are an opportunity for retailers to choose products for the upcoming fashion seasons and for designers to mingle with manufacturers, many who cut costs by producing in China or other Asian countries.

Cost-cutting is more important than ever because competition is intense and the crashing housing market has consumers feeling poorer.

Wal-Mart reported disappointing sales in January, Macy's recently announced it would cut thousands of jobs and AnnTaylor Stores Corp. and Talbots both announced a wave of store closings.

The cuts are hurting companies who come to MAGIC and could have an impact on the Las Vegas economy, which is bolstered by trade shows and conventions along with retail sales.

More recently, the Commerce Department reported Wednesday that retail sales were up less than one-half of 1 percent in January. Sales were expected to fall.

The news helped boost the stock market, but same-store sales were down during the week of Feb. 9 and the International Council of Shopping Centers warned that consumers "have pared their spending."

In Nevada, both retail sales and convention attendance dipped in 2007.

"I may cut down on the number of shows I attend," said Rosalie Gelston, owner of Thee Foxes Trot clothing store in Laguna Beach, Calif.

She's already cut employee hours and increased her own time at the store. She's also reducing the size of her orders.

Instead of ordering two dozen blouses, for example, she said, "I might go down to one dozen and see how it sells and place a re-order."

Maintaining strong business at conventions is critical to the local economy because business guests tend to spend twice as much as tourists on non-gambling activity, according to the Las Vegas Convention and Visitors Authority.

Fortunately for Nevada, when tough times hit valuable guests like Gelston tend to cut back on marginal events in favor of more established shows.

Gelston said she's likelier to eschew trips to New York and attend West Coast events like MAGIC until times get better.

She's not the only MAGIC attendee who is sticking with the show despite hard times at home.

Tony Baynard came from Michigan, home of the gut-shot American automotive industry, to scout products to sell at Grand Traverse Resort and Spa, an upscale business and golf resort.

"I live in Michigan and our economy isn't the best," said Baynard while taking notes on a resort-wear line. "People are very cautious about what they are spending these days."

Nevertheless, Baynard checked off items he planned to order during the upcoming resort season. He just won't order as much as usual.

"We are cutting back for sure," he said.