Back to The Future
Canadian manufacturer Nygård recently celebrated its 35th anniversary with a star-studded event that included a fashion retrospective of the company’s designs. Among the notables who turned out to honor the Winnipeg, Manitoba-based company and Founder and Chairman Peter Nygård were Phillip B. Miller Associates President and former Saks Fifth Avenue Chairman and Chief Executive Officer Phil Miller, Dillard’s President Alex Dillard, model Beverly Peele, actress Bo Derek, Canadian media mogul Ted Rogers of Rogers Communication Inc., and singers Freda Payne and Rick Livingston. Several Canadian government officials, including Manitoba Premier Gary Doer, also attended the event.
Each segment of the fashion show corresponded to a different decade and included music and clips from the era. Prior to the event, Nygård said he was particularly looking forward to the fashion retrospective – noting that, with the cyclical nature of fashion, many of the retro silhouettes on the runway were back in style.
Nygård said retailers are also returning to another classic: exclusivity. Once again, he said, retailers are asking for exclusive products to differentiate their stores and departments.
Peter Nygård (second from right) with his sons - Jessar, Kai, Mika
But, Nygård noted, one thing has changed dramatically for the fashion industry – technology has accelerated the entire production process, as well as the time it takes for a trend to reverberate around the world and between categories. Technology, he said, makes it possible to translate design information to the Far East, where an item can be produced, and then to Los Angeles, where it can be inspected, packed and sent directly to the retailer. And that’s exactly what Nygård does, monitoring and tracking each item through the company’s state-of-the-art distribution center - Nygård calls it a service center - in Gardena, Calif.
Nygård recently spoke with California Apparel News Executive Editor Alison A. Nieder about how fashion, business and technology have changed during the last 35 years.
Cal Apparel News: As you celebrate the company’s 35th anniversary, I’m curious about some of the changes you have seen the apparel industry go through.
Peter Nygård: Probably the most interesting of all is that we are returning to the fashion sense of when we started. It’s like déjà vu. The fashion era has returned to the ‘60’s and ‘70s. Even the retailing mentality has returned back to the mentality 35 years ago. It’s becoming exclusive product instead of just more of the same “let’s do what other guys have done.” In those eras, I remember the keywords were exclusivity and differentiation of product. The merchandising requirements have changed dramatically in the last three years and, quite frankly, returned back to what we regarded as very important 35 years ago. Trying to sell goods off-price wasn’t what they were doing 35 years ago. We were trying to get exclusive products, different kinds of products, unique fashion products that we could get regular price for. It’s quite refreshing to see that.
Phil Miller, Peter Nygård and Ted Rogers
The single biggest change that has occurred is the speed with which everything moves today, and technology has made that possible. Instead of dealing with months, we are dealing with hours – minutes almost. It’s made a dramatic difference in the speed of our information. In that regard, there used to be a time when we would go to Europe and look at what they are doing and could translate that a year later into North America and a year later that that into modern sports-wear. Everything happens at exactly the same time today – there’s no waiting anymore. It’s global market today, and the information era has brought us into everything in real time. It’s occurring at exactly the same time in Europe or anywhere else. It’s occurring at the off-price levels at the same time. That has made a massive difference. What is the same? I think the fashion looks the same.
Cal Apparel News: The apparel Industry has been slow to incorporate new technology, but Nygård was an early adopter of Incorporating technology into the manufacturing process. What was your strategy when you began building your In-house network? And how has that strategy changed in recent years?
Peter Nygård: To me, our industry- almost more that any other industry- is fed by the word “information.” And we have, if not the fastest-moving industry, certainly one of the fastest moving industries. Everything in speed requires technology- the speed with which you process information and from which you make decisions. And [25 years ago], we were so literally bankrupt in our information flow. [Technology] was a very clear solution, and we just had to embrace it and adopt it in a very meaningful way. Our industry was slow in doing that, but it became such an easy decision to make.
Once we got ourselves in a position where we had a handle on technology, it made a huge difference in our company- it’s what you call a defendable difference. We can defend our company. It’s not up for grabs. It’s not like someone can just knock it off. We can stay in business year after year after year based on that investment into technology. It was evident five or six years ago that this was the biggest thing that ever happened to our industry- maybe the most difficult thing to ever happen to our industry, but certainly the biggest difference.
I embraced the technology idea 25 years ago. I thought I could buy a little computer from Radio Shack- I was pretty Naïve. The vision was there; the reality of what was involved wasn’t. I think for the first 10 years, we were not on the right path. We had to abandon everything from the first 10 years, and it wasn’t until the next 15 years after that- and particularly for the last five- that we were really able to grasp the whole concept. That’s also when the Internet and the latest [Web-based] tools became available. That refocused the whole industry into Web-based technology, which really made all the difference in the world. It was affordable. It was fast. And it answered all our company’s and our industry’s needs.
Singer Freda Payne and Peter Nygård
Cal Apparel News: Your business seems to blend new technology with traditional, hands-on customer service. Was that your intention?
Peter Nygård: The industry breaks down very clearly into two components. [One] component, the service component, [means] supplying very fundamental products automatically to the stores. We have to stay in certain products to stay in business. The product has not changed too dramatically; the ability to do a better job with it has, and the timing of it has.
The issue of having basic fundamental commodities in stock all the time is more important than ever. It was important when I started 35 years ago. First thing I learned when I started in a company named eatons is you do 80 percent of your business with 20 percent of your product and you will never keep that 20 percent of product in stock. With technology, we are now doing it. That’s a huge difference.
The other half of our business is what I call the fashion factory. We have the ability to produce an enormous amount of product with the system we have. That’s our intellectual property- to produce product and design product, and the perfection in our fit and the control in our patterns. That’s a huge asset, and our retailer really appreciates that.
That’s a big missing ingredient for many retailers whom we try to do private brands for. They do not have the ability to create new product. They might have the ability to knock off product. But as private brands become larger and larger, your ability to knock something off becomes less and less, and ultimately you have to create your own [designs]. Or [you] go to somebody who can. We bring a lot to the table in that regard.
Cal Apparel News: We were at the opening of the Gardena facility. How does California fit into your business strategy?
Peter Nygård: We think it’s one of the finest distribution centers- we call it a service center- in the whole industry. It looks nice cosmetically, but the technology behind it is quite mind-boggling. I just visited California last week, and I had $300 million to $400 million capacity in there- the difference depends on our ability to start a prepacking facility. I now have property as big as that facility beside me that I decided not to lease anymore. I decided that I should double the capacity of my California distribution center and double that $400 million again, so it would closer to $700 million to $800 million in three years.
I think the future of the business is China, and I think China is best serviced by California. I see no reason to take the goods from China all the way to any place other than the West Coast- the West Coast’s Long Beach is one of the best ports- and then distribute it from there through the rest of the United States. I think logically and economically it makes sense.