Aug 26, 2008
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More apparel buyers choose US brands due to weak dollar

Aug 26, 2008

By Alexandria Sage

LAS VEGAS Aug 25 (Reuters) - U.S. clothing makers are finding retailers that once stocked their stores with a variety of European brands are buying locally, given the cost of doing business internationally with a weak American dollar.

The dollar has gained ground recently but is still weaker than previous years, and sellers attending the first day of the Magic Marketplace apparel trade show in Las Vegas told Reuters they had noticed more interest in home-grown labels from American as well as international buyers who once looked exclusively to Europe for their fashion.

"I've noticed a lot of people that bought European (brands) -- now they're buying U.S.," said Kambiz Hakimi, owner of Los Angeles-based Mesmerize, which makes some 80 percent of its colorful leopard, tribal and printed dresses and tops in the United States and sells to large department stores like Nordstrom and Dillard's and smaller boutiques.

Comfy USA, another made-in-the-U.S. brand of cotton and jersey knit pieces, has seen an increase of 25 to 30 percent in the number of accounts that formerly bought only international brands, said marketing manager Yong Kim.

The dollar has strengthened in recent weeks to $1.48 per euro, or about the level it began the year, from around $1.60 in the middle of July. But the greenback is still far weaker than over most of the previous two years. It began 2007 at $1.32.

Foreign companies now find better value in American brands, and established U.S. retailers from casual teen brand Abercrombie & Fitch to upscale department store Saks Inc to jeansmaker Levi Strauss & Co have reported robust sales in tourist sites like New York City from visitors on shopping sprees inspired by a weak dollar.

European retailers, too, are looking to American brands as a now-affordable option. Christine Phillipe, a women's apparel line targeting trendy 30 year-olds to stylish women 50 and up, has been increasing its European footprint in the past year and is sold now in markets as far apart as Spain, Australia and South Africa.

"European people are buying a lot of our stuff because of the dollar," said Margaret Cox, who represents the Los Angeles-based line.

Whereas the price of basic clothing items has not changed much in recent years, the price of designer brands are up, according to David Wolfe, creative director of retail consultancy The Doneger Group.

"Especially European designer fashion because of the disparity of the dollar and the euro," Wolfe said.

Barbara Lupo, co-owner with her husband of a boutique in Bellingham, Washington, that sells men's and womenswear, said, "(The weak dollar) has to factor into your thinking because it's a reality. If last year it (an item of clothing) was $89 and this year it's $109, is that a value to your customer?"

Still, sniffing out new and interesting product should be the driving factor in picking a collection, she said.

Canadians are also traveling south for bargains. Although the trade show management would not disclose the percent of foreign buyers in attendance, a walk through the convention floor revealed more than a few Canadian visitors.

"So far, it seems there are a lot of Canadian retailers at the show. That seems noteworthy," said Donald Leavy, vice president of sales and marketing for women's line Vertigo Paris, who said the brand is looking to break into the Canadian market.

One Canadian company attending Magic for the first time was Jessy Fashions, a wholesaler and importer known in Canada for the Minkas brand.

"Definitely we are looking for products," said Anil Puri of the Toronto-based company. "Rather than going to other places, maybe we'll find them here."

(Editing by Peter Henderson, Phil Berlowitz)

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