Last update - 00:00 17/01/2007
The winter wait for end-of-season sales
By Ilit Mainemer
An SMS message sent several weeks ago announced a 10-percent off sale at Shine, as part of a Hannukah and New Year's sales event. The message's recipient was invited to come to the store to take advantage of the discount.
There was something infuriating about the message. Elsewhere around the world, customers have generally enjoyed substantial discounts (of sometimes 50 percent) at end-of-season sales at chains and designer stores - whether they began in mid-December or on January 1. A 10-percent discount, which regular customers tend to enjoy anyway, seems a bit like mocking the poor. But Shine, located in Tel Aviv's Masarik Square, is not an exception to the rule. The fact that Israeli designers are announcing end-of-season sales long after the chains and importers prompts renewed wonder each time. Why isn't the Israeli market linked to the international market, why are Israeli standards different from those in other countries. Don't local designers eventually lose out?
The market and the 'little guys'
"The answers are clear," says Shelly Satat-Kombor, a designer and shoe marketer, "the price is a function of inventory, plain and simple. We manufacture a little at high costs. At the end of the season, the profit margin is low and we don't have the financial ability to cover a 50-percent discount."
Lulu Liam of Banot, which is now offering 15-30 percent discounts on her designs, also complains of production costs. "In France, the law determines when end-of-season sales start and end. That's the best way to work," says Liam. "Local inspectors check to see if stores and designers are operating according to the rules and that's how they control the market. Everyone offers discounts together, at once. The size of the discounts depends on the amount of stock each vendor has.
"In Israel, there's a problem with the end of the season," she adds. "Many large companies start offering discounts long before the international market, well before Hanukkah. They break us, the little guys, who manufacture in Israel (and not in China) at a high cost. Because of the big companies, customers approach us at an early stage and ask us when the end of the season is. That's why many designers offered Hanukkah specials this year, in order to attract buyers."
Shine will kick off its end-of-season sale of 30-35 percent discounts in another week. "The December event was a communal gesture in honor of Hanukkah, one that all the stores in the Masarik complex decided on together," explains Alice Dahan of Shine.
Signing an agreement
And why are the official sales only taking place at the end of January? The designers' answers point to the designers market, which takes place twice a year. "A norm has been established here that the sales happen ahead of the designers market," says Dahan. "As far as I'm concerned, the designers market provides important momentum and for several seasons it has been dictating [fashion] to the bon ton."
"The designers market is our indicator of the end of the season. If we offer sales before it, it will not be attractive [to customers]," says Satat-Kombor.
Israeli designers have signed an agreement with the designers market, which has been held since 1995, and in its twelfth year has turned into a giant venture. This venture is today sponsored by commercial entities, has a nationwide ad campaign and media exposure and brings in quite a bit of money.
Whether it's because it is the only fashion event consistently held in Israel, or because the designers market has become a label of its own, which designers sew into their clothes ("I manufacture clothes especially for the sale," Dahan says), designers are accepting the terms of the agreement, which stipulate that they cannot offer discounts of more than 30 percent before the market takes place. Only after the market, which this year will take place in early February, can prices officially be reduced below 50 percent.
Some will wait for the real deal
For many customers, the discounts are late in coming. Why should someone with a limited budget wait for discounts from an Israeli designer store, rather than buying imported clothes or brand name clothes in the middle of December or early January?
Apparently not everyone sees things this way. Some customers prefer to wait for the discounts from their favorite Israeli designers and will not be tempted by sales in brand name stores.
"Whoever likes Israeli designers, likes them," said one customer at Banker, which kicked off a 30-percent off sale this week for Keren Banker designs (Karin Ai designs will sell at a 15-percent discount and the Annabella line will marked 20-percent off).
According to designer Dorit Sadeh, her customers prefer to wait for the sales, because they like the designs. "We may want to be like the Europeans and the Americans, but we're different," says Sadeh.
We're different also because the weather is different. "Our winter is different," says Sadeh. "In Europe it starts in September, but in Israel it starts in January. If it's very hot, we offer a few discounts. This is a small market and we have to move."
While many designers are releasing seasonal collections relatively late this winter, for example, there were some who presented them in October and November too and there were catalogs launched even later. It seems that the designers have no interest in lowering prices so early on. "We also don't want to get the customers used to such early sales, so that they don't exploit the fact that there are early end-of-season sales and stop shopping already in November," says Sadeh.
Naama Bezalel's experience, however, is different. Bezalel, who in the past took part in the city designers market but has since stopped ("I don't need it as much, I opened more stores and am more exposed to shoppers; the market requires an entire program, it's big expense"), very much feels customers' pressure for sales. On Hanukkah she started offering 15-30 percent sales and has continued to offer discounts ever since.
"Customers today prefer to wait for bigger sales. The market in Israel has created an atmosphere, in which if you don't get a discount, you prefer to wait or give up on the item. So it turns out that for a fairly long period, you have to sell at a large discount and it's pretty frustrating," says Bezalel.
Come together
Many designers say they are upset that in Israel there is no law regulating the end-of-season sales, as in France, where winter sales start on January 1 in all stores and are limited to a few weeks, a law from which both customers and designers benefit. "The large companies manufacture specifically for the end of the season," says designer Ronen Chen. "They manufacture in China, six months in advance, knowing that there will be end-of-season sales. Here, everything is more 'boutique-ish.' My company manufactures in real time: We design today and manufacture two weeks later."
Because of this method, Chen adds, "we don't have a large inventory left over that has to be sold, and we don't lose," nevertheless he says, "for years I've been talking about the need for instituting a syndicate of designers here who will offer sales together. But the big companies, Miss Lagotte, Castor and Fox, are always starting earlier."
Shelly and Elon Satat-Kombor, owners of Couple-of, decided this year to change their custom. Until now they would offer only a small discount until the designers market and their customers would try on boots in December but wait until the designers market to purchase them. This year, their store has been offering 30-percent off on the winter collection since the beginning of January.
"This year, for the first time we had a sale almost like everyone else from Castro to the shops in Kikar Hamedina," says Shelly Satat-Kombor. "We have control over the manufacturing and we decided to clear out the winter line. Whatever sells, sells. Whatever is left will be sold at the designers market at even greater discounts. Whether it was worth it or not, I'll only be able to say after the market."
There is more. This year, for the first time, Couple-of will preview its summer collection already in the beginning of February, just like in Europe. A rare occurrence, if not unique, in the local design scene.