1610 Stonegate Blvd.
Elkton, MD 21921
I hope this letter finds you and your family in great health and your business finding some measure of success in this economy. I wanted to first say thank you for your support of House of Carrington. As a small, exclusively distributed luxury brand, it is only through strong relationships that we have found our early success. I take great pride in the efforts of our sales and customer service teams and the relationships they have built which have enabled our business to grow in extremely difficult conditions. Our success at retail, however, is entirely due to the belief of our retail partners, like you, in our brands and our products and sharing that belief and excitement with your customers. For that, I offer my deepest gratitude.
Over the past 12 to 18 months, we have all witnessed a challenging economic environment that only a few people have ever witnessed before. For me, once is enough. The business of wholesale and retail apparel has fundamentally changed right before our eyes. A business that was built on advance orders 5 to 8 months ahead of the start date is now gone. In its place we have a new business where both wholesalers and retailers alike, want to reduce inventory, buy what we need when we need it and avoid the advance commitments that backed up on all of us the last few seasons. The interesting thing about difficult times is that you learn a lot about yourself, your business and your business partners. We all must evaluate everything we do to ensure we have the right strategy going forward.
As much of a challenge as it represents for us as a wholesaler, when we put our retail hat on, we believe the new model of lower advance orders and stronger in-season orders is the right model for our customers. We also believe this model is here to stay and therefore we need to adapt how we do business. We must find a way to keep production minimums at the lowest possible levels and shorten lead times while offering a solid foundation of core items and small, but compelling fashion collections. We must also find ways to leverage technology to bring efficiencies to the order process, increase our speed to market, decrease costs and increase margins for ourselves and our retail partners. The challenge of adapting to this new market reality is a daunting one, but one we are excited to tackle. To quote a dear friend of HOC, we want to be the “idea guy” in the market and innovate with new products, new technology, and new ways of executing an old business model.
Our first step to adapt to the new reality is a complete evaluation of the coming fall season. In analyzing our advance orders for fall along with our production minimums and lead times, the most responsible business decision we can make is to not produce the fall collections. Based on production minimums, the amount of inventory required to fulfill the orders would create far too much excess. We would have made this decision sooner but we wanted to give the decision as much time as possible to look for signs of improvement. As you know all too well, retail has remained challenging on all fronts. Being a small, family owned business, our margin for error is small and we need to make sound financial decisions at every turn.
Our decision was a difficult one to make but probably no more difficult than decisions you have had to make in your own business. We are in a position with our current inventory to ensure flow of quality products throughout the fall season continuing to support you when you need us. We have beautiful sweaters, great colors and patterns in short sleeve and long sleeve knits and fleece, and amazing sport shirts made from the best fabrics in the world. Our mission as we move forward from today is to maximize the use of our existing inventory to service your needs as best we can for the fall season.
Our Spring 2010 collection is in the sample stage. We have already taken the steps necessary to ensure this collection is closely aligned with our strategy for the future. You can expect to see a solid foundation of great core items with small, but frequent fashion collections to maintain a consistent flow of product throughout the season. While we are cautious about the short term, we are optimistic about the future and excited by the challenge of adapting our business to the new market realities. We will certainly reach out to you when we are ready to present our line for Spring 10.
We sincerely appreciate your support both past and future. Extraordinary times call for extraordinary partnerships. Should you have any questions or suggestions about our product, our plan, our people or anything else, please feel free to call me directly at our corporate office.