Apparel insiders fear death by "safe" fashion

LAS VEGAS (Reuters) - If the best fashion inspires shoppers to buy even when they know they shouldn't, this year's crop of safe styles is sure to keep their wallets shut tight.

The apparel industry has been avoiding risky styles for a few years, hoping that will help them weather a U.S. economic slump. But industry insiders see that as the surest route to failure, pointing to a few success stories of outlets willing to try bold fashions.

"It's not a lack of trend, it's manufacturers are not taking the risk to try something new," said Raj Arora of the Funky People label, whose moss green, turquoise and burnt orange patterned knit dresses attracted a throng of curious buyers at the Magic Marketplace apparel trade show this week.

The blame runs on both sides, whether it's retailers seeking out blander styles and demanding more time to test products before placing orders, or apparel makers toning down designs or even regurgitating last year's styles.

But the power of selling compelling products was evident in the financial performances of retailers such as American Apparel Inc or Urban Outfitters Inc, which outperformed rivals and posted a 30 percent rise in sales in its most recent quarter, thanks to its eclectic offerings.

"At the end of the day, great product is the best weapon you have in a down economy," said Magic International President Chris DeMoulin.

On the flip side, traditional women's retailers like AnnTaylor Stores or Chico's FAS Inc have acknowledged that bland fashion choices have haunted results and promised investors better merchandise in the future.

Paula Bennett, president of Talbots Inc's J. Jill brand, where second-quarter sales fell nearly 8 percent, said recently that clothing on offer "was heavily weighted in basic versus compelling fashion."

That's the wrong strategy in these times, said Barbara Lupo, co-owner of a boutique in Bellingham, Washington, who had just placed an order for leather coats at the show.

"I certainly am not giving up the interesting for the basics," she said.

But finding the 'wow' factor in today's styles is hard, said Judith Lang, owner of three stores in the Boulder, Colorado area. "There's no fresh inspiration. It's hard to find something unique."

"LESS GAMBLING"

The risk is that unique styles can backfire and leave retailers with excess inventory that eats into profit margins.

That gamble is all the more dangerous in a weak environment where women's apparel sales are down 4 percent from last year and men's are up a mere 2 percent, according to the NPD Group.

Inventory control is under particular scrutiny from Wall Street, and companies from teen brand American Eagle Outfitters to global retailer Gap Inc are scaling back to preserve their profits.

"The selection in specialty stores becomes old," said Mark Lipman, vice president of national sales for suitmaker Marina Imports. "They're not taking as many chances."

Lipman said his company is also doing less gambling now when it designs suits "because it's such a flat market."

Lip Service designer Autumn Walters, whose Goth-inspired vinyl and black clothing is sold at edgy retailers such as Hot Topic Inc, said she's noticed caution on the part of the label's customers, with more of them testing a batch of clothing in stores or on the Web before placing a larger order.

"The buyers are being safe and the customers are not safe," she said.

Some manufacturers are scaling back normal procedures in the lean environment at the expense of new clothes, said Kambiz Hakimi, owner of the Mesmerize brand. He noted some of his competitors, unwilling to invest money in new samples, were showing older styles at the show.

To top it all off, the modern American woman is barraged by a host of conflicting fashion messages, from different hemline lengths to cuts of a jean, said David Wolfe, creative director of retail consultancy The Doneger Group.

"When a customer is confused, she grinds to a stop and does not buy," Wolfe said.

(Editing by Braden Reddall)