Pickering nuclear plant a hot attraction

Pickering in the six years since Three Mile Island made headlines with a radiation spill, the nuclear power station has become one of the biggest tourist attractions in Pennsylvania, spawning a sideline industry in nuclear joke T-shirts and bumper stickers. In Ontario, Pickering Generating Station, 32 kilometres to the east of Metro Toronto, has had its own much publicized accident. But you won’t find the jokes here. Instead, Ontario Hydro encourages people to visit the plant in the hope that it can convince them that a nuclear reactor is not really a dangerous thing to have in your own back yard – at least if it is a Candu. Walking right into a nuclear reactor and the station’s main control room are the highlights of a fascinating look at the plant’s operations.

Casual visitors are invited to drop in at the Visitors’ Centre, which is open seven days a week and has an array of displays of the hands-on kind at the Ontario Science Centre. Youngsters immediately gravitate toward computer games such as Dream Home and Hangman, which dispense trivial facts as the players push buttons. Learning that a radio consumes 48 cents worth of electricity (or 12 kilowatt hours) a year may not provide the same thrills as a round of Pac-Man, but on a recent mid-week visit there were crowds of school children around every game, eager to try the electronic quizzes.

Cartoons and film shorts present both a humorous history of energy consumption and a physics lesson in the makeup of heavy water, which, one learns, is literally heavier because of an extra neutron in the hydrogen atom.

By simply making a telephone reservation, visitors can arrange to join one of the Saturday morning tours through the station. Age is the only restriction – everyone must be at least 18 to join a group of about a dozen people who get a look at the very heart of the operation. Hard hats, steel-toed shoes and safety glasses, all provided by Hydro, are donned after an introductory film or slide show has prepared them with some rudimentary facts about how the power station works.

As we entered the station, guide Jack Muir, the media and community relations officer, explained that the station was divided into three zones, each signifying a progressively greater likelihood of radioactivity, from none in zone one (largely an office area) to the most in zone three in the immediate vicinity of the reactors. Before passing from one area to another all workers and visitors are required to have their hands and feet monitored by a geiger counter.

Cleanliness seems to be a compulsion here. The first room we see is a laundry. Floors are constantly being wiped. “That is because radioactivity appears in the form of water vapor and dust,” Mr. Muir explained. Workers who must handle radioactive machinery wear balloon-like suits of yellow plastic that are supplied with a flow of fresh air.

Pickering’s Candu reactors are fuelled by cylindrical bundles of natural uranium which are estimated to have roughly one- fifth the radioactivity of the enriched fuel used in many U.S. reactors. Unstable uranium atoms split spontaneously, sending particles flying apart. As they collide with other atoms they create heat. When a moderator, such as the heavy water used in the Candu, is used to slow down the speeding neutrons, it produces a chain reaction. The heat generated by all this activity is collected in heavy water circulating through the fuel tubes. In a boiler heat from the heavy water passes into ordinary water which turns to steam that powers a turbine.

The last of Pickering’s eight nuclear reactors is nearing completion and visitors who come before April will have a chance to walk inside reactor number eight before it goes into operation. Surrounded by 1.2- metre-thick walls of reinforced concrete designed to withstand the impact of a jumbo jet crash, the reactors consume fuel which is inserted, by machine, into tubes. Inside reactor number eight visitors can see the pressurized tubes which, when filled, will hold 4,680 fuel bundles, each weighing 22 kilograms. Fuel loading machines allow the bundles to be removed or added without shutting down the reactor. “Much like putting another log on the fire,” said Mr. Muir.

Used fuel bundles are highly radioactive when they are removed from the reactor and must be stored in a protective bay. At Pickering the bay looks like a giant swimming pool, painted blue and filled with demineralized water. The 30- metre-long pool is estimated to be large enough to hold all the fuel bundles that will be used until 1996.

Questions about spills and the risk of radioactivity get reassuring replies. Mr. Muir explained that reactors one and two remain shut down since an accident in August, 1983, but he was quick to point out that, unlike Three Mile Island, there was no equipment damage, beyond the initial crack in one tube. At Pickering, radioactive fuel and heavy water have been removed and the reactor has been cleansed with a mild acid “similar to what is in a grapefruit.” Three Mile Island has not yet been decontaminated.

The tour’s biggest surprise came not in learning about nuclear reactors, but finding that any visitor who has signed up for the tour can enter the station’s main control room and get a close-up look at its expanse of monitors and controls. Four operators, one for each reactor, are always on duty testing safety systems and recording any work done. Visitors are permitted to take photographs, providing they don’t use a flash. THE TAB The Pickering station makes for an interesting and cheap outing from Toronto. Take Highway 401 east and turn off at the Brock Road exit. Motorists are invited to drop in for a look around the Visitors’ Centre. Adults can book a free tour of the station by calling 839-0465.

A car isn’t necessary to reach the plant. Pickering Transit buses run between the GO train station and the plant. Cross-country skiers may want to bring along their equipment to ski at the plant park. Burns’ night Robbie Burns’ birthday will be celebrated Jan. 26 at Hamilton’s Dundurn Castle with an evening of Scottish country dancing, Highland dancing, a piper, fiddler and an address delivered to the haggis. An informal tour of the castle which includes the kitchens will provide an opportunity to sample some Scottish fare.

Fleece market: sweating it out

Fleece is no longer golden. Oversaturation, fierce competition and an onslaught of other hot fabrics, such as cotton and Lycra spandex, have stifled the fleece category’s growth.

While still the backbone of some firms, fleece is presently on the down side of the apparel spectrum, after an almost three-year run of record sales. During that time, fleece sportswear, activewear and functional wear, including sweatpants and sweatshirts, were best-selling items.

That was until last fall, when Lycra spandex and blends using that fabric began taking hold in the markets where fleece had reigned.

Major fleece manufacturers and suppliers, such as Bassett-Walker, Pannill Knitting Co. and Tultex, have each attributed their recent poor performances in the second quarter to a slowdown in fleece sales.

Earnings at fleece manufacturer Russell Corp., on the other hand, rose 18.2 percent in the second quarter and 17.3 percent in the six months ended July 3, a sign that fleece products have not totally fallen by the wayside.

Another user of fleece for its line of women’s and men’s athletic, recreational and leisure wear, Champion Products, Inc., has also posted a net gain. Earnings for the Rochester, N.Y., company increased 88.6 percent and sales rose 16.3 percent in the first quarter ended April 1.

Fleece, especially the heavyweight variety with a high cotton content, continues to perform in the misses and mature markets, some executives said, but in general it has leveled off in the juniors area.

This, they added, is because of the slouch, loose-fitting look fleece lends in covering up a multitude of bodily sins, as opposed to Lycra spandex, which is geared to better figures.

As an active, functional fabric, fleece is also being replaced by form-fitting spandex. However, fleece still shines as a comfortable fabric for lounging around or going to the gym.

New colors and updated styling are needed to breathe renewed life into the fleece market, said some executives. Others noted that the market was crammed with novelty fleece looks last fall, and sales were still off the mark.

“When you have something that is so popular, you can almost predict a slowdown,” said Robert Appelbaum, director of apparel/mill marketing for Cotton, Inc., here. “Everyone was in the fleece business, and those who weren’t normally into fleece, both suppliers and manufacturers, rode the trend when it was hot.”

He pointed out that fleece with a high percentage of cotton is still growing, even in an otherwise shrinking market. Appelbaum also indicated, however, that the “whole piece goods market, including fleece, is weak right now, as is the entire apparel segment.”

Premium heavyweight fleece with a 95 percent cotton content is doing well, Appelbaum said, followed by 80-20 and 70-30 blends of cotton with polyester or acrylic.

However, the 50-50 mix of acrylic with cotton and polyester is just doing “fair.” Appelbaum noted that all fleece has to have some synthetic fabric, namely polyester, to pass a flammability test.

The fate of fleece for fall will be determined to a large degree by sales during the back-to-school period. But whatever turn fleece takes, he believes it is a resilient fabric, being both comfortable and practical, and that it will always be a “major hitter in the apparel business.”

Sales of women’s (age 16 and over) activewear, which consists mainly of fleece sweat pants, sweatshorts, sweatshirts, hooded sweatshirts and warmup suits, totaled $1,800,000,000 last year, compared to $1,200,000,000 in men’s activewear, according to John H. Tugman, vice president and general manager of soft goods information service for MRCA Information Services, Stamford, Conn.

Total women’s activewear units sold last year totaled 154,200,000, and 99 million men’s activewear units were sold.

MRCA tracks purchases recorded monthly by a nationwide panel of 11,500 households representing more than 30,000 individual consumers.

In terms of units of activewear sold for the first five months of 1988, women’s outpaced men’s, 46,400,000 units to 24,400,000 units.

Growth of women’s activewear for the first five months of the year was up 14.2 percent in units and 9.2 percent in dollars, to $479,200,000 over the same period last year.

For the same period, sales of men’s activewear were up 17.2 percent in units and 17.2 percent in dollars to $277,900,000.

The death knell for fleece has definitely not been sounded, according to Philip W. Davis, vice president of the apparel division of Reebok International, Ltd.

“Fleece will always be there in a major way as a base fabrication.”

He explained that fleece lost a little bit of its sheen last year because of a market “oversaturated with the stuff.” A lot of companies were especially interested in lightweight fleece categories, he said. As a result, its perceived value diminished markedly.

“Two years ago everything was in fleece,” Davis said from the Canton, Mass., company’s New York showroom. That was until alternative fabrications such as blends including Lycra spandex with cotton and nylon began infiltrating the marketplace.

While fleece continues to be useful as an items business, Davis said that the graphics are not as bold and overpowering as in previous seasons. “We are showing novelty fleece items in updated body silhouettes with minimal graphics.”

To keep the fleece business bouyant, Reebok is showing fleece jersey tops with Lycra spandex bottoms.

While the pairing of these two fabrics seems logical, when worn separately each takes on a different function for distinct occasions, Davis said. “You wouldn’t hang around the house in Lycra, but you would in fleece.”

Although heavyweight fleece goods are still in demand, lower-end fleece is not being bought, Davis maintained. “The difference is that the customer owns this type of fleece already and will only buy it as a replacement, as opposed to expanding her existing wardrobe with it.

“Fleece has been around for a long time,” he added. “It’s not like it dropped out of the sky. It’s still an important fabric, but its emphasis has shifted. Will it come back like before? Maybe not, but it will be redefined to add additional dollars on. Newer and alternative ways to produce fleece are key to its acceptance.”

One of the country’s major producers of fleece athletic wear, Russell Corp., a publicly held company in Alexander City, Ala., does a “substantial percentage” of its $500 million volume in fleece, according to Sonny Seals, vice president of marketing.

“I see nothing that indicates fleece has slowed down,” he said. “There is still a growing demand.” He did acknowledge that the market has softened. “The softness depends on what happens this fall at the consumer level,” Seals continued. “I haven’t heard of any excessive inventories at retail. If a good season develops, the market will firm up quickly.”

He believes that, while basic fleece shows signs of slowing down, it is the value-added categories offashion and graphics that will help the business grow.

“We do see the element of fashion as being more important,” Seals said, adding that much of the basic merchandise it ships is “decorated” before it reaches the consumer.

While the company uses other fabrics for its line of athletic team wear, T-shirts, tank tops and shorts, fleece remains the nuts and bolts of Russell’s business, namely basic fleece sweats–pants and sweatshirts. “Our business is driven by basic crewnecks and sweats,” he said.

These and other fleece products are bought more often by women than men, with the end users fairly well split among both sexes, Seals pointed out.

“We have been very successful in including women in our advertising campaign and brand presentations at point of sale,” he said.

“And we have found that women are comfortable buying fleece in men’s departments.”

As Lycra spandex gains a foothold in athletic tops and bottoms as well as sportswear, Seals does not believe fleece is being usurped to any large degree by this man-made fiber.

“Fleece is almost a universal product, and it’s not skewed just toward the young,” he said. “Some of the fastest-growing segments are in the mature market. It is worn by everyone from kids who sleep in it, to school on up.”

Compared to a year ago, the fleece business at Nike, Inc., Beaverton, Ore., has been flat at best at the moderate-price level in basic silhouettes such as pants and sweatshirts in both the women’s and men’s divisions.

“Fleece is never going to go away, though,” said William E. Kennedy, the newly appointed vice president of Nike Sport. “What it needs is to be updated with the correct styling and new colors.”

Kennedy talked about the comfort factor of fleece and compared it to denim as a truly American innovation. Nonetheless, the firm’s business is showing the most spunk in blends of nylon and Lycra spandex, and cotton and Lycra, in both its running and cross-training categories.

Present strengths at the firm, which had sales of approximately $150 million in women’s and men’s apparel for the fiscal year ended May 31, are its functionally driven designs.

But Kennedy pointed out that this merchandise is not always worn for the sole purpose of the sport it was intended for. Activewear, he added, is shaping up as a future growth area.

To breathe new life into fleece, Nike has begun working with other types of the fabric, such as heavyweight jersey and French terry, which are comfortable yet fashionable.

Nike uses domestic suppliers for its fleece, which is used in both the functional and active segments of the Sport division, with 50 percent of the active business made up of fleece products.

Of the three fleece weights, Kennedy said the firm does best with heavyweight fleece, which he said is good for fall selling and cold weather wear. Midweights have become less important, while lightweight fleece has fared the least favorably. “It looks cheesy,” he said.

At Gitano, the New York apparel manufacturer, the four fleece groups that the firm has offered for fall have less depth than in previous seasons, said Jan A. Morgenstern, national sales manager for junior sportswear.

“Fleece is not dead as long as there are people who are active, and in fact, fleece is doing better in misses than it is in junior,” the executive said.

But because fleece has become less sought-after, Morgenstern said the firm’s sales plan is down for fall and holiday, with the lost dollars to be made up in knit categories.

Heavy jersey, some reverse ribbed fabrications and a major statement in wovens is being undertaken to make up for the lost units in fleece.

Gitano’s fleece top division, having also geared down for holiday, has similarly taken on other areas such as sweaters and novelty knit yarns.

Morgenstern said updating fleece styles may help revive the category, but he was quick to point out that “there was more novelty business in fleece on floors last year than ever.”

“I’d love to see fleece bounce back,” he added. “It’s one of our main fabrications for fall and holiday. But if you already own fleece and replace it once a year, when you look in the closet and discover you already have it, there isn’t the need to go out and buy it.”

He continued that “because of the uncertain economy, people have become more selective in their buying, especially if they already own fleece items.”

Jerome Wiggins, vice president of finance and chief financial officer for VF Corp., whose divisions include Bassett-Walker, Martinsville, Va., a major maker of fleece apparel for women, children and men, said in a statement when the company’s second-quarter results were released, “Bassett-Walker has been very soft in the second quarter. The conditions obviously reflect the fleece market, which is very soft.”

David G. Sweet, vice president of merchandising for Bassett-Walker, said the jury is still out on its performance this year, since it is a second-half business. “How well it does at retail remains to be seen,” he said.

But because fleece manufacturing capabilities expanded during the fabric’s prosperous period, Sweet said, fleece supplies have reached normal levels. Therefore, retailers have the luxury of placing their fleece orders later than usual without undue concern about delivery delays, he added.

“There is a lot of business still done in basic fleece,” Sweet said. “It’s not dead by any means. Crewnecks and a switch from raglan sleeves to set-in sleeves, as well as sweatpants, particularly those with pockets, are doing well.”

Since the styling of basic fleece has a unisex appeal, women have been buying fleece merchandise in increasing numbers, he said. “Women by far and away buy the most fleece, not only for themselves but for their boyfriends, husbands and children as well.”

Last year the women’s market for fleece took off, Sweet added, but this year he expects sales to be flat with 1987.

Among the advantages of fleece, Sweet said. are the comfort factor and its ability to easily slip on. “It’s easy to get out of work and slip into a sweatsuit which, because of better styling, can be worn outside the home in addition to exercise. It has become more acceptable for casual wear.”

The Tultex Corp., Martinsville, Va., one of the country’s leading producers of fleeced knit activewear, is feeling the pinch of a soft fleece market, judging from the most recent sales and earnings for its second quarter and six months ended May 28.

Second-quarter earnings were down to $51,297,000, compared with $60,178,000 in 1987, and earnings were $1,773,000, or 6 cents per share, compared with $3,121,000, or 12 cents per share, for the same quarter last year.

For the six months, sales were $103,949,000, compared with $124,659,000 a year ago, and earnings were $2,800,000, or 10 cents per share, compared with $7,429,000, or 27 cents per share.

In a statement, William F. Franck, Tultex chairman and chief executive officer, said that the quarterly and six-month results were in line with management expectations, which also include a strong fall and winter shipping season.

Tultex is a vertically integrated producer of fleeced knit activewear and leisure time apparel, operating yarn and apparel factories in Virginia and North Carolina.

“Excess customer inventories resulted in slower customer demand during our first half, compared with the same period last year,” he said.

“Shipping activities are now picking up, and we feel comfortable with earlier predictions that more than 70 percent of our volume will be shipped in the second half. We anticipate, however, that soft pricing and higher costs will cause profit margins to be down from last year’s record high.”

A new game plan for activewear

Activewear firms are doing a reshuffling act. They’re developing products for more activities, targeting younger market segments and finding new competition.

Heightened interest in sports once considered nontraditional and insignificant as volume generators is changing the face of the market.

While apparel for tennis, skiing, running, swimming and golf are still considered core categories of the approximately $10 billion retail activewear industry, other areas are taking hold fast. The latest activewear figures show a wholesale volume in 1987 of $5.6 billion, according to Sebastian DiCasoli, director of marketing services for the Sporting Goods Manufacturers Association, North Palm Beach, Fla.

Included were women’s and men’s sweats, golf and tennis wear, and Lycra spandex categories like leotards for fitness and cycling shorts. T-shirts, however, were not taken into account.

Aerobics, working out on exercise machines or with free weights, cycling and volleyball are among the secondary tier of sports that are inching their way into mainstream consciousness, as well as the concept of cross-training, which creates clothes that can be used for varied fitness programs and is probably the most prominent new direction.

Much of the apparel meant for these activities lends itself to the use of Lycra, a stretch fiber that is giving activewear a new look. Lycra is used by itself or is more commonly found as a blend with cotton or nylon.

Meanwhile, firms traditionally known for upscale tennis wear, like Ellesse and Fila Sports, Inc., are branching into other categories and designating portions of their lines for a younger customer — with prices to match. Then there is a new crop of firms like Ixspa 2000 and Apex One, both hoping to take a bite out of the leaders’ market share.

And companies not known for activewear are jumping into the fray. The bodywear firm, Marika, a division of Weekend Exercise Co., Los Angeles, has introduced its Aerodynamics line for cross-training and fitness programs in a matte nylon and Lycra.

It has added a spokeswoman, Paula Newby-Fraser, who recently won the women’s Iron Man competition in Hawaii wearing Aerodynamics. “We are going after the Nikes and the Adidases of the world,” said Norman Zwail, senior vice president of Weekend Exercise.

For the most part, activewear makers no longer want to be identified as a one-sport house. And as new sports take hold, some traditional ones, like tennis, have lost a bit of their clout.

“Tennis wear sales have been soft throughout the industry. They’ve been on a down curve for the past two years,” said Paul Cassilo, director of sales for the apparel division of Le Coq Sportif. He claims that when tennis was hot, newcomers, many of which were moderate resources, jumped on the bandwagon. But now, with tennis sales off, “there’s been a natural fallout of these brands, and the better brands, like Le Coq Sportif, have been able to endure and increase their business,” said Cassilo.

Robert E. Clancy, vice president apparel sales and merchandising for Ellesse, said: “Tennis sales have been flat.” He cited a lack of newness in the market, in general, and a leveling in the sport’s popularity. “Nothing exciting is happening in tennis,” Clancy said. “There’s no big name American female star to stir interest.”

The apparel division of Reebok International, Ltd., no longer does a separate women’s tennis line, preferring instead to focus on apparel for aerobics and fitness.

Explained Philip W. Davis, director of department store sales: “We no longer do a separate tennis line, but continue to work tennis outfits into the overall collection. Now we make tennis clothes upon the request of our store accounts. This was done last year with the consolidation of certain categories and divisions. We had too many eggs in one basket. Right now, our emphasis is aerobics into streetwear, but tennis will again be an opportunity sometime.”

For its aerobics and fitness program, Reebok is pairing Lycra shorts, some capri length, with fleece tops. For early fall deliveries the aerobics look will emphasize street fashions and move more into functional indoor gym wear in late fall when temperatures drop.

Davis said that while stretch fabrics are more important for warm weather wear, the firm does more business in fleece separates, warmups and jerseys in brisker climes.

“Bottoms continue to drive the business,” said Davis.

Some of Reebok’s Lycra tights also have large rectangular color panels that run down the front of the legs. “This is being done to take the emphasis away from the hips,” Davis said.

Beginning with spring, Reebok will offer separate Lycra programs for men and women to take advantage of the growing number of females using the fabric in their everyday gym wear.

Davis said the Lycra supply is still not readily abundant because of its popularity not only in activewear, but sportswear. “There’s still a shortage, so we have to buy in advance. It’s a gray goods situation in order to protect yourself,” Davis said.

Similarly, Adidas U.S.A., added to its established running and tennis apparel divisions with a new cross-training category for spring.

“This is not unisex clothing but a separate women’s line being offered as a collection, as opposed to separate pieces,” said Eileen M. Short, product manager for women’s apparel. “It is geared for workout wear, aerobics and cycling. It’s a real open market and a great opportunity for us.”

The collection, which wholesales from $10 to $18, is made of two fabric combinations: polyester, cotton and Lycra, and nylon and Lycra.

Le Coq Sportif is showing several categories. For fall it will launch a French loop terrycloth and Lycra program for gym and workout wear as well as an outerwear line. The jackets in the outerwear category are made of Taslan-crimped nylon with a light polyester filling, and sport embroidered patches.

A women’s active tops group will also be rolled out for fall. Previously, the line was unisex but now the more feminine colors will coordinate with the firm’s tennis and warmup apparel.

“Our strongest category in department stores at present is our novelty separates and warmups for leisurewear dressing,” said Nancy Fischer, key accounts coordinator. “They are unisex and made from novelty fabrics like crinkled nylon Taslan and balloon cloth.”

For the American market, Ellesse, a Reebok unit known for its tennis and skiwear, will go after a less affluent segment of the tennis wear market through a group called Chiaro — a collection within Ellesse — starting with fall. While Ellesse is generally thought of as a label for the well-to-do mature customer, Chiaro aims to target a younger market — women in their 20s and 30s — with bold, fun apparel. Chiaro means “young and bold” in Italian.

“We still do the more expensive Champagne group of tennis shirts and separates which wholesale for fall from $35 to $170, but we also want to go after a younger market with more affordable price points in the $27.50 to $32.50 range,” said Clancy.

While the Champagne group is made in Perugia, Italy, Chiaro merchandise is produced in Hong Kong.

The firm, whose tennis clothes are endorsed by Chris Evert and other pros, had a total volume, including shoes, in excess of $35 million in 1988. Of that amount, $11 million is in apparel, 80 percent of which is tennis wear and the remainder ski clothes.

Almost 75 percent of the firm’s activewear is designed with women in mind, Clancy said, noting that its “Italian styling wasn’t used correctly in the men’s line, but we are in the process of rebuilding that area.”

Hoping to breathe new life back into the tennis market, Ellesse, showing its innovative side, is touting a mercerized cotton top with attached cotton and Lycra bottom for fall. That look, which resembles a top with attached panties, is meant to be worn with a tennis skirt.

Although the company has no tennis dresses now, Clancy believes that they are coming back. For spring 1990, therefore, there will be at least one tennis dress in each group, he said.

He added that “warm-ups continue to be strong, not only for participatory use but also to go to the store in.” A hallmark of the brand is its luxury offerings, such as the cashmere warmups, which wholesale for $170.

Clancy pointed out that there was a time its prices escalated because of lax sourcing policies. Now, however, by increasing its global sourcing network, he said the firm has been able to maintain its price structure without skimping on quality.

“We’re becoming more accessible,” is the way Edwin Crumm Jr., an independent sales representative for Fila, described the firm today. He pointed to a unisex volleyball line in florescent colors for spring, and an athletic collection of Lycra bottoms and T-shirts, which bowed last fall, as examples of the firm’s new face.

“But tennis remains our backbone,” Crumm said. The endorsement of Boris Becker has helped. Apparel for skiing, golf and swimming are also produced by this Milan-based firm.

One of the mainstays in its tennis wear line is a form-fitting knit tennis top in Egyptian cotton with stretch properties. New for spring are warm-ups with a silky hand made from a fabric called Nova, a cotton and nylon blend.

Nike, Inc., which makes activewear for a wide variety of sports, has gone one step further with its newest category, ACG (All Conditions Gear).

“It’s a whole new approach to outdoor dressing,” said Greg Thomsen, director of apparel marketing. The clothes are for activities such as running, mountain climbing, hiking and backpacking. ACG includes Thermax innerwear, Polarfleece jackets and Gore-Tex parkas, each tailored for specific applications. Wholesale prices range from $10 for underwear to $125 for Gore-Tex outerwear.

With the discontinuation of its swimwear line, Head Sportswear, a division of The Leslie Fay Cos., Inc., is focusing on its more profitable skiwear, tennis and golf lines, according to a company spokeswoman.

In explaining the demise of Head Swim, she said: “The whole design of the swim line was geared to a different, more fashion-oriented market. But in the customer’s mind, Head has always stood for a functional, active product.”

But it is also forging into a new area. After the closing of Head Swim, the firm launched a Lycra line of shorts, tights, tank tops, and T-shirts; multi-functional items range from tennis to street and active workout wear.

Ski clothes, however, remain Head’s top volume producer. The firm offers two skiwear lines annually, but targets different customers. Its regular Head line consists of functional and fashionable skiwear, and its Tyrolia for Head collection is roughly 10 percent less expensive and meant for a younger customer. Current colors are pastels and brights with more brights stressed for 1989 skiwear.

Notable styling developments in its spring tennis line include outfits with a colorful ticker tape graphic, and a color story of fashion brights and low-key neon colors.

“Instead of doing a hot, florescent green, we have made it in lime green,” the spokeswoman said.

The use of black in tennis wear for spring — a bold, nontraditional move — to complement its fashion bright story, is a novel approach for players not forced by their clubs to wear white.

She said a best-selling skirt is one made of a cotton and nylon blend that is wrinkle-resistant and washable.

While wholesale prices have remained relatively stable throughout the past year, the spokeswoman pointed out that if an extra 50 cents or $2 is tacked on, the customer does not resist paying more. Wholesale prices for its spring tennis line range from $16 to $22 for skirts and tops. Fall 1989 skiwear wholesales for $150 to $250 for a jacket and $75 to $90 for bottoms.

Head operates its own factory in Maryland where much of its tennis wear is made. Skiwear is manufactured in Hong Kong.

Bodywear: getting into sports

Bodywear manufacturers are getting serious about sports.

Increased consumer demand for workout wear for specific sports has several leading resources styling merchandise for the dedicated athlete. Rather than forfeit function for fashion, however, manufacturers are offering highly stylized workout apparel that performs.

Surprisingly, shorts and tops are getting more play than leotards, where the bodywear makers have traditionally placed their emphasis.

Among the companies that will launch their first performance lines during the November market are Danskin, Gilda Marx Industries, Jacques Moret, Softouch, Avia and The Weekend Exercise Co. They’ll be competing in this field with such established names as Hind Performance, Moving Comfort and Nike.

In testing and promoting these lines, bodywear firms are tying in with top-ranked athletes as their spokesmen and spokeswomen. Several companies are using athletic events to test the styling and performance of these garments as well as to promote the company name.

Although performance apparel is lending excitement to the bodywear category, some executives say that rather than providing plus business, it is trading dollars from their regular bodywear line. Others say these looks are opening a new channel of distribution by targeting sporting goods stores. At such stores, a variety of sports is addressed, and price is secondary to function, they say.

In developing sports-serious groups, designers are keeping the look clean and simple. They are stressing the functional aspect of high performance athletic wear, but using hot activewear colors and new fabrics to update the looks.

Many executives said they are investigating new options in fabrics, including Du Pont’s Supplex nylon, which has a cottony hand, and Coolmax, a moisture wicking apparel fiber designed to keep the body cool and dry. Both are said to dye well, hold vibrant color and dry quickly. Other manufacturers want to create similar fabrics in factories owned overseas, but nothing has been perfected to date, they say.

Peter Szanto, activewear manager at Du Pont, said the bodywear market “is ready for something that is new and that performs because fashion was the only thing driving the business.”

“These are premium products that are starting to hit a broader market,” said Szanto. “The initial target market for Supplex was skiing because the product is very high tech oriented. Coolmax was also developed for performance markets, for the serious athlete.” However, these fabrics carry a hefty price tag, Szanto said.

Danskin is segmenting its bodywear business into pro, or function, and fashion groups, said Michael Fornaro, vice president of sales. A new cross training line is expected to be launched within the next six months, he said.

“There is another market segment that we can address, not just dance and exercise,” said Fornaro. He pointed out that special hang tags will be used to tell about the features of each item and fabrics characteristics.

“We’ve hired a separate designer for the new line and have been test marketing it on pro athletes,” he said. “After they wear-test the merchandise, we make the necessary changes.”

Fornaro said Danskin is targeting sporting goods accounts for the pro line and is looking into specialty fabrics such as Supplex and Coolmax. “These fabrics are expensive — maybe three to four times what we pay for fabric right now. They drive the price to a very high level, but there are customers that are just waiting for it.” For example, the pro running group will wholesale between $17 to $25, he said.

Norm Zwail, senior vice president of the Weekend Exercise Co., Santa Monica, Calif., said that fitness apparel is a way to broaden the business. “We’re remarketing Marika as a fitness apparel company rather than just a bodywear firm,” he said.

Its newest line, Aerodynamics, is expected to be launched by year end, he said. The collection is expected to do a volume of $3 million, or 10 percent of Marika’s total volume in its first year.

“Women are looking more for fashionable sports apparel,” said Zwail. “The Aerodynamics line is giving them an alternative in styling and price points. It’s a line of performance-oriented merchandise.”

Weekend Exercise is also test marketing the new collection on professional athletes. Promotional celebrity endorsements, posters and in store clinics are included in the marketing program. The group wholesales from $10 for leggings, $13 for padded cycling shorts and sport tights to $20 for a triathlon suit.

Zwail sees the bodywear business as being “split, with half the merchandise sold to a hosiery department and the rest sold in sporting goods stores. There will be some trading in funding for the new category.”

Moving Comfort, Alexandria, Va., which has built its business around high quality performance athletic wear, sees the cross training market as a growing business “because more and more women are getting involved in several different workout programs,” Elizabeth Goeke, executive vice president and head of marketing. “The same customer that is running is taking a low impact aerobic class and cycling.”

The Moving Comfort label consists of shorts and tops. The line offers apparel for a multitude of sports and fitness pastimes, including aerobics, cycling, fitness, hiking, running, tennis and walking. Wholesale prices range from $8.25 for tricot shorts to $8.50 for a Coolmax tank top and $9.50 for Supplex running shorts.

“Any aerobic type of activity is not restricted to a leotard,” said Goeke. “We are a performance line first but fashion is also important because we design for women. We haven’t sacrificed fashion in color or prints.”

Goeke said that hang tag programs are very important to the customer and to the store. “The look of a garment gets the customer to try it on,” she said. “But the customer also has to appreciate all the positive characteristics to be willing to spend the money.”

Goeke said that Supplex is the only answer to a competitive running short. “The fine yarn has a soft hand, it washes well and it holds color.”

Gilda Marx Industries, Inc., Los Angeles, is launching its Performance Wear line with specific design requirements. The group is an addition to its fashion bodywear lines, and was designed to meet the needs of professional female athletes around the world.

Designer Gilda Marx explained that the Performance Wear customer differs from the aerobics customer because she participated in a wide range of fitness activities. “She is more critical and demanding of the fit and of the technical correctness of her performance apparel,” Marx said.

Performance Wear is made of Antron nylon and Lycra spandex. It is designed with flatlock power stitching, contoured seams, 1 1/4-inch waistbands and flat sewn seams.

Jacques Moret is going after the sports enthusiast with the introduction of a new fabric in its L.A. Gear bodywear line, said Jill Ozer, director of merchandising. Trademarked Cotton Shimmer, the two-sided fabric is made of 52 percent nylon, 40 percent cotton and 8 percent spandex.

“We’re letting the fabric tell the story rather than overpower the garment with a lot of embellishments,” said Ozer. “From market studies and focus groups, we’ve found that a consumer wants the comfort and feel of cotton next to the body, but a fabric that holds and shapes the body. Cotton Shimmer does both.”

In promoting the line, Moret is attaching a separate hang tag to each garment, which explains the characteristics of the fabric, Ozer said. Moret is also tying in with health club instructors and sponsoring aerobic workshops for fitness professionals.

The L.A. Gear Cotton Shimmer group will wholesale between $10 and $15.

Ozer said that the fabric will be included in a cross training group under the Bonnie August label. This line, to be launched in November, includes crop tops, triathlete suits, leotards and leggings, she said.

Avia Athletic Footwear is introducing apparel for aerobics, running, cross training, cycling and basketball, designed for the serious competitor. The collection carries the logo For Athletic Use Only’ and is endorsed by professional athletes.

Avia is tying in fitness wear, running apparel and separates with its newest shoe line, Transport, which targets the cross training athlete.

Mass merchants a fertile field for sportswear

With their growing emphasis on soft goods, up-to-date fashion and in-store presentations, mass merchandisers have become a more acceptable and profitable route for many sportswear and denim firms.

It appears to be a two-way street. Manufacturers are better servicing the mass merchandisers with quick response programs, Electronic Data Interchange, and brand support that includes national advertising and in-store displays such as fixturing, posters and point-of-sale items.

“The consumer is demanding the upgrading,” said Haim Dabah, president of The Gitano Group. “Five years ago the customer was happy to find any branded apparel in a mass merchandiser. Today, they want more. They want a better assortment of merchandise as well as a better presentation.”

Sportswear executives from the Lee Co., Gitano, Henry I. Siegel Co., Manhattan International and Laura Apparel Industries, Inc., said mass merchandisers are taking their cues from department stores in becoming more attuned to decor.

Manufacturers feel there is still room for improvement, noting they see some reluctance on the mass merchants’ part to upgrade their decor too much since costly improvements jack up the prices. And the stores’ primary objective is to maintain a low price strategy.

The growth of branded sportswear in the mass merchandisers can be traced back to the early Eighties when department stores started to upgrade their own merchandise and began replacing their moderate-price brand names with private label. Seeing an opportunity, mass merchandisers were eager to trade up and grab the lost business, thus making substantial gains in market share.

Stephen F. Mandel Jr., vice president research department for Goldman Sachs, said, “Apparel has been increasing as a percentage of discount store sales and they are increasing floor space for soft goods.”

As in the department store field, acquisitions are creating increasingly stronger chains among the mass merchandisers, who are able to buy with clout. The most recent deal has been the purchase by Ames Department Stores, Inc., of the 392 Zayre discount stores last October. Ames announced in December they will close 77 stores including 74 of the Zayre units. The Dayton Hudson Corp., parent company of Target, bought the 50 Gemco store sites in 1986 and converted them to Target stores in 1987; Dayton Hudson also bought 31 Gold Circle/Richway stores last September from Campeau Corp., and will open those May 1 as Target stores, and 35 of the Gold Circle/Richway stores were leased to Hills department stores at the same time.

In addition, Bradlees Department Stores sold 58 of its sites to Hechinger Co. a chain of Do-It-Yourself building supply stores based in Landover, Md., in August, 1988.

Competition is heating up at the discount store level, especially in the denim area. Lee and Gitanojeans seem to be running neck-and-neck for the top spot in denim market shares with the discounters, according to industry executives.

Branded denim has been a staple in the apparel areas of nearly all mass merchandisers for about six years. Mass merchants continue to grab larger portions of the denim market share every year as the number of department and specialty stores offering basic five pocket jeans has declined.

More than 70 percent of Gitano’s business comes from the mass merchants as the diversified apparel firm has sold its products to the mass merchandisers since its introduction of the name about 11 years ago. Gitano’s licensed and joint ventures products are generously represented in the discounters.

Gitano’s proportionately sized jeans for juniors, misses’ and large sizes has been its most successful line with the discounters and continues to gain momentum. Some of the other Gitano products include outerwear, tops, bottoms, nightwear, and children’s. Some of its licensed products include socks, hosiery, watches and bags. Most recently, as reported, the firm has launched its own version of modular dressing under the label Choices for the mass merchandisers.

Dabah said spring bookings in all categories are well ahead of plan and a continued increase in business is expected.

“The consumer is more comfortable today shopping the mass merchants. Over the last five years, mass merchandisers have had trouble converting the customers from hard goods to soft goods. A woman would go in for an Instamatic camera or her husband’s underwear, but not shop here for her own clothes. The introduction of brands into the discount stores in 1979 helped,” explained Dabah.

The firm supports its name with an aggressive national advertising program that includes special events, print ads in magazines and newspapers and outdoor ads. Many of Gitano’s customers are hooked into quick response programs and EDI systems. The company also has set up display units in the stores with signs and point-of-purchase posters.

Jerry Fox, group vice president of the P.S. Gitano division, said, “The mass merchandisers make a strong presentation of Gitano because they feel it’s a nationally branded fashion label. It’s something they can legitimize their own labels with.”

The executives said over the last five years, the mass merchandisers have given more space to soft goods. They explained the mark up on soft goods is higher than the mark up on hard goods; therefore the apparel business is more profitable for the stores and brand names work to draw the consumers to the clothing areas.

Dabah said when a mass merchandiser carries a brand name, it improves sell-throughs for the entire product category. However, he explained, “When the product is a trendy styled top, the brand names are less important because it will sell on its own merit.”

“The mass merchandisers have come much closer to the department stores in their thinking and the way that they buy,” Fox pointed out. “It used to be what you had in the discounters you saw in the department stores the year before.” The executives said the discounters have changed their style. Where they used to shop price almost exclusively, they now shop for more up-to-date fashion to keep up with the customer demand for better merchandise.

Despite the recent boon in doing business with the mass merchants and the trading up by both the manufacturers and the stores, a taboo still exists among many manufacturers when it comes to selling the mass merchants.

Diverters are often used to shuttle branded apparel products to the discounters. Some manufacturers who sell to discounters are not willing to admit it at the risk of jeopardizing their businesses with department stores and chains. It seems, that before retailers place an order, they often ask, “Who are you selling?”

“Manufacturers by and large want to do business with those mega retailers — the mass merchants. They just don’t want anybody else to know about it. They want to do it quietly. They come up with new names for labels so they can do business with the mass merchants, but the mass merchants want brand names,” explained Dabah.

Goldman Sachs’ Mandel said, “The diverting market is a very liquid one. There is a tremendous amount of goods available through diversion. There are brands who have billed themselves as not selling to the retailer like Nike and Levi’s, which are available in quantity through diverters.”

Levi Strauss & Co. executives say the firm does not sell its Levi’s brand to the mass merchants. A spokeswoman from Levi’s said, “Levi’s has guidelines for distributing its Levi’s branded apparel. Our distribution channels do not include mass merchandisers. We are aware that some Levi’s branded products sometimes find their way to these outlets, and we investigate these situations when they occur. Levi’s does not support these diverting activities and actively pursues them to stop them.”

A spokeswoman at Nike Inc., the footwear and activewear company based in Beaverton, Ore., said the firm does not sell its products to the discounters. “We make it clear to our accounts that we do not approve of them diverting our goods. Whenever we find that people have diverted our goods we take steps against them,” she said.

Bob Luehrs, president of sales, marketing and advertising at H.I.S. has no qualms about selling its Chic jeanswear brand to the mass merchants. “Discounting itself has become a way of life,” he said. “More than five years ago, a customer would not want to be seen in a discount store. That feeling has changed dramatically because of upgrading and the bringing in of known brands.”

The denim company offers its Sunset Blues collection to the better department and specialty stores while its Chic collection sells primarily to discounters.

“Six years ago we turned discounters away. They got our merchandise from diverters. In the past six years our business has exploded with them. Each year we grow with them,” he said. “We are well over 100 percent ahead in units this spring over last spring. The success is tied to our lower pricing strategy giving the retailer an opportunity to make a higher profit.”

Luehrs said the discounters have become more aggressive fashion wise. “Acid wash was the biggest selling jean in 1987 in a number of department stores. It was the same in the discount stores. Key fashion items are being sold at K mart just the way they are at Macy’s.”

Luehrs believes the proximity of the parking lots to the stores, shopping carts and no elevators are built-in convenience factors that work to bring in more shoppers.

“Every discounter I know, K mart and Target, Hills, — right on down the line — all want to trade up in terms of services and environment. They’re coming closer and closer to department stores. In years to come there won’t be such a diversity in pricing, merchandising and decor,” he said.

Lee, which is owned by VF Corp., has been selling to the majority of discounters for about six years, with the exception of K mart Corp., and Wal-Mart Stores where two of VF’s denim firms Wrangler and Rustler sell.

Joe Pacifico, senior vice president of consumer marketing at Lee, said the mass merchants currently hold one-third of the denim market and Lee continues to go after this category as other stores have walked away from denim. “The mass merchandisers are a bigger force in the market. They’re going after the consumer need for denim,” said Pacifico.

Bob Stec, corporate vice president marketing for VF and the former senior vice president consumer marketing for Lee said, the discounters represent about one-half of Lee’s women’s business. The rest is made up of specialty store chains and departments stores such as Belk’s and Lazarus.

According to Pacifico, Lee’s spring line “sold extremely well,” however he noted that Lee’s overall business is even with last year. He explained that spring bookings have been good, but the “carry over” and reorder business has been slightly down.

Stec agrees brand names do lend credibility to the mass merchants. “Discounters have become much smarter product people, however not at the expense of price. They’re still price-conscious, but they have the right product,” Stec said.

Lee services all of its customers in the same way by offering a variety of jeanswear at consistent prices. “A lot of manufacturers cut different deals for different stores,” he explained. “At Lee our products carry one price for every store.”

Commenting on the apparent race between Gitano and Lee for the number one slot in denim sales with the discounters, Stec said, “Gitano certainly has to be reckoned with. They walk the fence just the way Lee has. They sell to department stores and mass merchandisers.”

Manhattan Industries signed a five year pact last April with several licensees to produce and market apparel under the Lady Manhattan label. From its inception, the lines were specifically targeted to the mass merchandisers and chain stores.

Tops, which are manufactured by Land ‘N Sea, and bottoms, which are manufactured by About Sportswear, were launched for holiday retailing, while socks, manufactured by Neuville Industries, Inc., were launched for spring selling.

Fred Rothstein, president of Manhattan International, which handles licensing for Manhattan Industries, a division of the Salant Corp., said as department stores began to focus on private label in 1983, Lady Manhattan’s business began to decline. But at the same time discounters began to trade up. Through consumer studies launched about two years ago, Rothstein said the label continued to be recognized as a brand name.

“The department stores have over reacted on private-label programs that have not performed at retail versus branded apparel. The mass merchant is vitally interested in obtaining brands of our stature,” Rothstein said.

According to Rothstein, the Lady Manhattan lines, are targeted to the career woman, and have been successful at retail. “Even in the questionable retail climate for holiday, Lady Manhattan had sell-throughs, and spring bookings are exceeding holiday bookings,” he said.

At Laura Apparel, a moderate priced sportswear firm based here, Herbert Bernstein, owner and chief executive officer, said 70 percent of its business comes from chains and mass merchandisers. The 35-year-old firm, whose volume, according to industry sources, exceeds $50 million, manufactures collections under two labels specifically for the chains and mass merchants: C’est Joli by Laura, a junior collection that sometimes hangs in misses’ departments, and C’est Joli Too by Laura, a large-size line. Its other junior collection, labeled Sportego and Sportego Too sells to department and specialty stores. The C’est Joli label wholesales from $3 for a polyester or a polyester knit top to $12.50 for jumpsuits or pants.

Bernstein said, “Our bookings are three times ahead of last years’ and between now and next June we’re going to be 20 percent ahead. With our upgrading, the retailers are buying more and more from us because we not only have fashion forward merchandise, but also many staple items.”

“Mass merchants have come of age and they’re getting respect. People want more stylish garments and they will pay more for them,” Bernstein said.

Laura Apparel has expanded its C’est Joli offerings of coordinated and related separates each year and they introduced sport dresses, which are casual knit dresses, for spring. Laura Apparel executives research trends and shop fashion centers worldwide for design concepts.

At Nike, function is everything

Rebounding over the past year after some bumpy seasons, Nike is out to make sure its apparel moves ahead with its athletic footwear.

A key strategy at the Beaverton, Ore.-based firm is to reemphasize function in its apparel over anything else. It is also into collections marketing — coordinating the look and color of its apparel with footwear — hiring new personnel for its expanded divisions, and opening a new outdoors line.

The goal of collections marketing, which was first seen in its spring 1989 lines, is to achieve a combined color coordinating effort between footwear and the outfits meant to be worn with a particular sport’s shoes, along with the accompanying accessories, say Nike executives.

Along these lines, the firm no longer incorporates its men’s wear designs in its women’s collections by simply using a feminine color or print.

“Things that work for men don’t necessarily work for women,” said Greg Thomsen, apparel director of marketing, on a recent visit to the company’s Manhattan townhouse and showroom. “Simply coloring an outfit pink or using other pastels doesn’t do it anymore,” he said.

Thomsen added that it is important for a women’s line not to be styled for men and to emphasize function. To help fine-tune this message, the firm has segmented its women’s and men’s collections into 18 divisions, seven of which include women’s apparel categories for running, fitness, water sports, tennis, cycling, activewear and basics. The firm continues in its search to hire three key personnel for each division during the segmenting process.

“Whether the area is tennis, aerobics, or running, each unit will ultimately have its own designer, marketing manager and developer, instead of having three designers create 601 different models for men and women,” said Read Worth, director of merchandising, who made the trip East with Thomsen. Nike executives maintain that utilizing personnel for each division fosters a higher level of expertise for personnel, which in turn creates a better understanding of product and its performance capacities.

By placing a greater emphasis on producing functional clothes, Nike’s strategy appears to be paying off. The women’s apparel segment’s quarterly sales have been doubling during the past year. At one time, Nike had dabbled in non-authentic activewear and fashion at the expense of function. It didn’t work out, as reflected in weaker sales, since it was not in keeping with the firm’s image.

“The women’s area is one of the most important elements in Nike’s growth; it’s a wide-open area for us,” Worth said. Of total apparel sales, however, men’s apparel still accounts for a substantial share of the business, making up 80 percent of the projected companywide women’s and men’s apparel volume of $200 million during the current year. Sales of women’s and men’s apparel in its 1988 fiscal year ended June 1 were $142,900,000. Companywide sales, domestic and foreign, including footwear, totaled $1,203,400,000 in 1988, up 37.2 percent, with earnings climbing 83.4 percent to $101,695,000. Its best volume categories are running, fitness, tennis and basics.

For the first three months of Nike’s 1989 fiscal year, earnings rose 127.2 percent to $56,986,000 and sales jumped 80.5 percent to a record $510,686,000 from $282,828,000 a year ago. Domestic apparel revenues were up 47 percent and foreign revenues in apparel and footwear rose 35 percent.

Nike’s latest foray is in an area called All Conditions Gear, which will be shown to the trade and pre-lined between now and early next year before being rolled out to stores beginning next June.

“It’s a whole new approach to outdoor dressing,” Thomsen pointed out. The clothes take the participant through a variety of sporting activities such as cross-training events, including running, rock and mountain climbing, hiking, backpacking trips and other expeditions.

“It’s clothing that protects you in any environment based on a three-prong layering system. There is a thin inner layer of Thermax underwear against the skin, followed by a fleece layer that adds warmth and a waterproof breathable outer layer,” said Thomsen, who should know from personal experience; he climbed Mt. Everest.

“We expect this clothing to allow better performance because it’s light, but warm and it doesn’t restrict movement,” he added. Wholesale price points range from $10 for underwear up to $125 for Gore-Tex outerwear.

Not only is Nike building its lines, but it also is in the process of creating a new 475,000-square-foot headquarters in a campus setting spread throughout a grouping of five buildings. Like the nine buildings it presently operates from, the new 75-acre campus will also be located in Beaverton. But unlike the present setup, all of the buildings will be in close proximity, instead of spread around town.

The project is expected to be complete either late next year or early 1990. “The new campus will serve to consolidate all of its operating units in one area,” Worth said.

Among other amenities, the campus will include a wellness center and child care center for Nike employees.

Importers bewail quota quandary in new system

Textile and apparel importers said this week they’re heading for a mess of new quota problems with the new year.

The problem, according to the importers, is the government’s decision to implement a new textile category system even though Congress has failed to authorize the Harmonized System, the new tariff schedule to which the category changes were tied.

The long-awaited shift by the United States to the Harmonized System, scheduled for Jan. 1, has been put on hold until Congress either passes the dormant omnibus trade bill or authorizes the new international tariff schedule via independent legislation.

In the meantime, the government is going ahead with plans to introduce a revised textile category system on Jan. 1. The category system determines the quotas and visas for textile and apparelimports.

For importers and brokers, the immediate effect will be felt at U.S. ports in the next few weeks, when goods categorized under one system will be examined by Customs agents interpreting a different set of rules. In addition, the shift in category descriptions will make it difficult for importers to determine when quotas have been filled.

“Textile and apparel importers will have major problems,” said Robert Leo, a staff attorney with the American Association of Exporters and Importers. “They will have to deal with the current system until Friday, and the interim system after that. Some present entries will switch to new categories under the new system, but the description of the item will not change until the Harmonized System is implemented. Importers will have to keep multiple sets of books.”

An importer of children’s wear, one of the areas where categories will be substantially changed, predicted “tremendous problems.”

“I see double migration,” he said. “What I buy on Jan. 1 may be one item, but considered something else later.”

Clint Stack, who runs a private importmonitoring service in Washington, D.C., complained that only a few weeks ago did the government publish forms explaining the correlation of the new category system with the existing tariff schedule. “It also needs some revisions. It isn’t consistent with the tariff schedule,” he said.

Stack suggested it would have been more logical to hold off on the new category system until the Harmonized System is in place. He charged that the government was buckling to pressure from the domestic textile industry to implement the changes.

The Harmonized System, which attempts to standardize tariff systems throughout the world, will be adopted by most of U.S. trading partners on Jan. 1. Authorization is included in the omnibus trade bill, which is mired in a House-Senate conference committee that won’t meet until Congress returns from recess in late January. The bill, which includes controversial measures opposed by the Reagan administration, could take weeks or months to reach the President’s desk.

Moves to authorize the Harmonized System in a separate piece of legislation fell short in both houses in the days before Congress adjourned for Christmas recess. Insiders said Democratic leadership in the Senate blocked the move in order to retain leverage over the administration, which wants to see the new schedule adopted.

But Carl K. Davis, East Coast counsel to Nike, Inc., argued that the Democrats have misplayed their hand.

“I think Sen. Lloyd Bentsen misjudged the importance of the Harmonized System to the administration. It won’t make or break the trade bill. All he’s done is irritate a lot of business people.”

Bentsen (D., Tex.), chairman of the Senate Finance Committee, reportedly blocked a Senate move to attach authorization to the spending bill recently passed by Congress.

A quota management specialist at the Customs Service predicted problems with the switch to the new category system. “We’ll have to charge quotas set up in 1987 for merchandise entered in 1988,” she said. “Goods coming in under the interim system will show a category that may not have existed. We’ll have to convert back to the 1987 system until that quota is filled.”

Makers expand offerings, see strong fall

Having increased the number of colors, styles and fabrics in their women’s lines, activewear manufacturers are predicting a strong fall season. Fleece is expected to continue as the leading fabrication, they said, but some new fabrics, such as French terry and various cotton and polyester blends, are likely to fuel orders.

The one hurdle in the season, manufacturers said, is one they have faced every season — the fact that non-sporting goods stores still have not found a niche for women’s activewear.

“Department stores have been floundering for years,” said Leslee Grant, women’s marketing manager at Nike. “They hang activewear in various departments, so the consumer doesn’t know if she should look in the weekend, bodywear or authentic activewear departments.

Manufacturers said most department stores do not maximize the potential of the women’s activewear business. In contrast, they cited specialty store Lady Foot Locker as a store that does an exceptionally good activewear business.

Lady Foot Locker is a “trend setter for our industry in the way they merchandise the goods,” said Joseph Kirchner, vice president and general merchandise manager of the Adidas USA textile division.

For fall, Adidas has added more thematic groupings, with designs inspired by such themes as field hockey and archery, said Kirchner. “We will offer products for different taste levels and different channels of retailing,” he said, adding that roughly 40 percent of the Adidas line is aimed at the junior consumer and the rest is for women. The junior merchandise is styled with large Adidas logos and multi-colored number and sport-name badges.

Kirchner said he expected fleece tops, middle-to-high price warmup suits, and big tops with badges or embroidery to be best sellers.

Adidas, which has a wholesale price range of $12 to $60, does “approximately 35 percent of its volume with sporting good stores; 30 percent in department stores; 25 percent in specialty stores like Lady Foot Locker and the rest in different types of distribution,” said Kirchner. “The sporting goods stores take the basic goods while department and specialty stores take on the fashionpieces.”

He said that although Adidas’ women’s business is growing one-and-a-half times faster than its men’s, the “split is still 75 to 25 between men’s and ladies.”

Champion Products, whose women’s business has comprised primarily school uniforms and college sweatshirts, is offering an expanded, more fashionable line of activewear, said Sharon Wilkes, design director.

“We still have a very authentic base to our company but we see the peripherals growing,” she said. The Champion line will be composed primarily of fleece “in a range of 20 colors, like rich amethyst purple, bright sunset orange, and pastels as well as classics,” said Wilkes.

Champion, whose line wholesales for $7.50 to $40, will also test market a women’s “funky sweat pant” in major metropolitan areas, said Wilkes.

“We’ve always been doing women’s as part of the men’s line,” said Wilkes, “but never made a real statement with women’s wear before.” She said the company does “a huge business with Lazarus, Lady Foot Locker and Athletes Foot.”

Bassett Walker, which last year had a wholesale volume of $230 million in fleece, according to Tom Butler, executive vice president, will add more bright colors and pastels in the line and introduce two new fabrics. One fabric is called Sturdy Sweats by BW, a 9-ounce polyester and cotton, and the other is a 95-percent cotton and 5-percent acrylic blend with “improved softness and performance.”

“Fabric and fabric weights are becoming more and more important,” said Butler. Although many companies are pointing to an influx of fashion into the activewear field, Butler said, “We have a lot of basic merchandise that is selling well, like a cotton rib fabric we use for basic elastic waist pants and different tops.”

Last year, he said, Bassett Walker, whose wholesale price range is $4.75 to $12, did most of its volume with retailers like J.C. Penney, Mervyn’s, Target.

Nike, which redirected its women’s line last spring by offering more fashion colors and advertising specifically for women, is merchandising its fall line “by attitude,” said Grant.

It will offer “three groups for three attitudes of women,” said Grant. The first group is aimed at a woman whose “workout is an important part of her life. She’s worked really hard at aerobics and wants to show off her hard work.” The second group is for women who belong to gyms but are not as diligent in their workouts. The third group is for those who don’t work out but buy activewear to wear on weekends. “She likes to look comfortable and casual,” said Grant.

Nike will offer bright colors, such as hot fuchsia combined with an aquamarine or a bright blue combined with a bright green, said Grant. “And we’ll relate the whole indigo story to stretchable fabrics in our aerobics line with an indigo stretch material.”

As for fabrics, Grant said French terry is becoming “a real key fabrication in separates and in suits and the popularity of fleece in both prints and solids is continuing.”

Overall, she said, Nike activewear, which wholesales for $8 to $50, has been “growing phenomenally each season since we have focused specifically on it as a target business.”

The base of Nike’s distribution is in sporting goods stores “like Paragon Sports (in New York), which is not where women would normally go to shop,” said Grant. While she pointed out that the company was “still primarily a footwear company,” women’s activewear is a growing part of its business.

Shoe firms gain a foothold in activewear

By taking advantage of their high level of brand awareness, leading athletic footwear manufacturers are making impressive strides in the women’s activewear market.

Three top footwear specialists, Nike, Reebok and Adidas USA are all patterning their activewear strategies after their shoe success.

Reebok, the newest entry in activewear, has experienced explosive growth over the past three years in athletic footwear, due in large part to the popularity of its aerobic shoes. Reebok’s sales rose to $307 million in 1985 from $17,500,000 in 1983. The company has begun to diversify, moving into the athletic apparel and activewear markets, in addition to other athletic-foot-wear.

Mark Silberman, vice president and general manager of the apparel division at Reebok, outlined the company’s strategies in pursuing the activewear-athletic-apparel business. Reebok, based in Avon, Mass., has structured the apparel division as a totally separate entity, and is taking advantage of the strong recognition of the Reebok name, applying it to basic merchandise.

Silberman explained that the division’s goal is to distribute selectively an activewear line, and has chosen 18 department stores and their branches with whom it will conduct business in 1986. Its initial thrust follows its sneaker orientation: fitness, tennis and active sportswear.

Silberman expects the women’s activewear business to comprise 35 percent of Reebok’s total apparel business this year. In the women’s area, he sees tennis apparel playing a dominant role: “We have a tremendous market in tennis shoes.’ He expects to position the apparel in the moderate to upper-moderate-price market. “We’re going to operate in the highest quality fabrics and construction,’ he said. For fall, 80 percent of the line will be manufactured domestically, with the remainder made in the Far East, said Silberman.

He sees the biggest growth coming in fleece activewear and fitness apparel.

Silberman explained that, initially, an activewear line launched for spring concentrated on the commodity basics. It now is adding more fashion merchandise. “We feel in the first year 80 percent of the apparel will have an outside logo on it,’ he said, emphasizing the importance of exposing the Reebok name on apparel. He said the company will only sell to accounts that carry its footwear.

For fall, T-shirts whole-sale for $15 to $20, shorts for $16 to $20 and sweat suits for $50 to $75. Silberman said the emphasis is on color, natural fabrics and distinctive styling. “We have concentrated on the categories where Reebok athletic shoes are already dominating,’ said Silberman. He explained that in tennis, for example, the firm has avoided gimmicks and concentrated on shirts and shorts to match, with a sweater or warmup.

The fitness segment includes leotards and tights. Accessories include hats, socks, T-shirts and bags that are color-driven, said Silberman.

Nike’s main thrust in the activewear business is in the fitness category, said Stephen Gomez, Nike’s marketing manager. “We’re trying to look at the big fitness picture, not just in apparel, but in sneakers, too.’ Originally, Nike thought it could compete successfully in the spectator activewear market, but found that it wasn’t accepted by the consumer, who wanted authentic merchandise fromNike. Nike is the largest athletic footwear company in the U.S., with sales approaching $1 billion this year. It switched gears for fall and is offering the consumer authentic merchandise, supplemented by spectator sportswear. Although authentic apparel will only account for 20 percent of the sales for fall and spectator for 80 percent, the line throughout has an authentic look, particularly in tennis wear. He said, “We couldn’t fight with sportswear resources, and we weren’t authentic, so it was decided to pursue another strategy.’ And “controlled growth’ is the most important part of that strategy, he pointed out.

In the fitness category, Nike addresses aerobic, weight trainning and cross-country apparel. For fall,Nike will carry forward its tennis wear from the previous spring.

Gomez said the company’s strategy in the athletic footwear category is developing the best product for the athlete, and then supplementing that with other products. For istance, it developed advanced sneakers for basketball pros, he said, and then expanded the category. That strategy is carried through to apparel, he explained.

For example, Nike will offer fitness tights for instructors, as well as for super-fit types, and then for the general public. “We take elements of authentic merchandise and bring it into basic merchandise,’ he said. The firm will also bring the price points down for noninstructor merchandise. “In department stores, they tend to stay away from high-end authentic pieces. They buy the middle and basics of the line.’

Gomez said 35 percent of women’s activewear for fall will be distributed to department stores, 40 percent to sporting goods specialists and 25 percent to sports apparel specialty stores.

Gomez stressed, “We wanted consumers to have a legitimate reason to buy Nike.’ Although the firm is going to start with a functional orientation, it doesn’t preclude adding fashion merchandise. “We’re not Donna Karan and we’re not Body Map. It’s not that our consumer doesn’t buy that, but they buy us for something else.’

For fall, logo sweat-shirts wholesale for $15; warmups for $29. “I think our price points are competitive and sharp, but not low,’ he said. Tights range from $14 to $19.

As for the competition in the market, Gomez said, “You’d be foolish to say today that Reebok isn’t a threat. They have a hot, acceptable brand.’

Gomez said women’s and men’s activewear generated $160 million in sales in 1985, but declined to predict sales gains for 1986.

Adidas is anticipating a 25 percent sales increase for fall in its women’s activewear, according to Joseph Kirchner, vice president of the textile apparel division. He sees the greatest growth coming in the fitness area, primarily bodysuits, Lycra spandex tights, shorts, shirts and T-shirts. He said the activewear is geared primarily to sporting goods stores, which account for 50 percent of sales. Department and specialty stores each account for 25 percent of sales.

Overall, women’s activewear is 25 percent of the apparel business at Adidas, with the biggest percentage generated by the fleece and warmup segment.

“I think it’s important to show a whole concept; not only items. “It’s becoming a lifestyle. You just can’t offer a bodysuit. You have to offer a full package to attract the retailer, and ultimately the customer.’

At Adidas, activewear accounts for 40 percent of the firm’s business.