STRENGTHENING NYCS FASHION WHOLESALE MARKET

2009 An NYCEDC Study

office of the mayor

Michael R. Bloomberg, Mayor Robert C. Lieber, Deputy Mayor for Economic Development Jed Howbert, Senior Policy Advisor, Office of the Deputy Mayor for Economic Development

New York City Economic Development Corporation

Seth Pinsky, President Tokumbo Shobowale, Chief Operating Officer Jason Wright, Chief Financial Officer Maria Torres, Chief of Staff

Business Development
Steven Strauss, Executive Vice President Michael Meola, Senior Vice President Patrick Murphy, Vice President, Head of Fashion/Retail Growth Initiatives Eric Johnson, Assistant Vice President

Marketing
Peyton Sise, Senior Vice President Shelby Hodgen, Vice President Randi Press, Vice President Matthew Sudol, Assistant Vice President

Strengthening NYCs Fashion Wholesale Market: 2009 NYCEDC Study

Fashion Industry Report
2009

Table of Contents
Introduction Acknowledgments Executive Summary Chapter One: Current Situation: NYC Fashion Wholesale Industry Overview of NYC Fashion Industry NYC Fashion Industry Ecosystem Chapter Two: Economic Impact of Fashion Wholesale Industry Employment Spending Visits Fashion Week Chapter Three: NYCs Competitive Position New York City Leads in the Number of Fashion Trade Shows, But Las Vegas Hosts Larger Events NYC Fashion Trade Show Producers Require More Exhibition Space in the City NYC Compared to Other Cities Chapter Four: Areas of Opportunity Advanced Scheduling of Trade Shows Enhanced Wholesale Information Improved Travel Amenities Increased Differentiation Garment Center Support for Young Designers Chapter Five: NYCEDC Initiatives Focus on Growth Opportunities Advanced Scheduling of Trade Shows Enhanced Wholesale Information Improved Travel Amenities Increased Differentiation Garment Center Support for Young Designers

www.nycfashioninfo.com

August 2009

Dear Friends: The fashion industry has always been a vital part of New York City, thanks in large measure to our unparalleled wholesale market. Were committed to ensuring a vibrant future for the industry by improving the wholesale buying experience and making it easier than ever to do business here. As part of our efforts, weve prepared the following report, Strengthening NYCs Fashion Wholesale Market, which provides a thorough examination of the fashion wholesale market and its important contributions to our Citys economy. Fashion wholesale activities are critical to New York Citys competitive edge. Thats why were providing buyers with better information, both about business opportunities and how to make the most of their time in the City during trade shows and other industry events. Weve also created a comprehensive new websiteNYCFashionInfo.comto help retailers, manufacturers and emerging designers make valuable business connections during and after Market Weeks. Improving the buyer experience will increase the number of showroom and trade show visits made per trip, boosting local businesses at a time when its needed most. After all, New York City is the Fashion Capital of the Worldand we are committed to ensuring that the industry remains strong for the future. Supporting and investing in the fashion industry is more important than ever. By recognizing areas of potential improvement in the wholesale market, we will help keep the fashion industry moving forward through these difficult times and make our City an even greater place to live, work and visit.

Sincerely,

Michael R. Bloomberg Mayor

www.nycfashioninfo.com

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Introduction
August 2009 Dear Friends: The fashion industry is a large and vital contributor to New York Citys economy, accounting for 6% of the Citys private employment and 175,000 jobs. Acknowledging this, in 2007, NYCEDC conducted a strategic review of the industry, which was designed to identify areas in which the Citys competitive position could be strengthened. This strategic review identified the fashion wholesale sub-sector as the Citys most promising sub-sector of the fashion industry for growth. This report follows up on the recommendations of the strategic review, providing an updated analysis of the size and scale of this sub-sector, together with a more detailed examination of where opportunities in the sub-sector can be found. Among the areas studied in this report are the following: Fashion Week The semi-annual event held in Bryant Park and venues around the City to showcase each seasons collections, drive media attention and create industry buzz. Trade Shows The events that take place during the various Market Weeks each year, helping designers and brands bring products to retailers and draw hundreds of thousands of wholesale fashion buyers from around the world. The primary venues for these events are the Javits Center and Piers 92/94. Wholesale Showrooms The 5,000 showrooms located throughout the City that provide wholesale marketing opportunities year-round. No other city in North America has New York Citys concentration of fashion and apparel brands and manufacturers. Wholesale Fashion Buyers The buyers from the worlds retailers, ranging from the largest department stores to small, specialty boutiques. Traveling to New York City annually or in many cases, a number of times each year is a ritual for hundreds of thousands of these individuals. Designers The talent that creates the vision and generates the products that define the industry. New York City both draws young, emerging designers and provides a home for some of the most influential, iconic names in design. The City serves as headquarters for most of the leading fashion and apparel brands in the United States and contains a considerable manufacturing base as well. The research data presented in this report were generated from a number of sources, including surveys of apparel buyers, trade show exhibitors, showroom owners and tenants, as well as trade show producers and fashion designers. Over 2,000 individuals and organizations participated in this study in 2007 and 2008 and NYCEDC wishes to thank each and every one of them for the invaluable contributions of time and energy. We hope you find this study informative and look forward to your feedback as we continue in our efforts to support and expand this vital industry.

Sincerely,

Seth W. Pinsky President, New York City Economic Development Corporation

www.nycfashioninfo.com

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Acknowledgments
NYCEDC acknowledges and thanks the following organizations for assistance with this important study and report: Advanstar Communications, Inc. Business Journals, Inc. Council of Fashion Designers of America Designers & Agents The Doneger Group ENK International Fashion Calendar Fashion Center Business Improvement District IMG Fashion Launch Collective NYC & Company Tradeshow Week Research

Front cover photography:

Button kiosk: Fashion Center Business Improvement District (Photographer: Kelly Campbell) Runway models: NYC & Company, 2008 (Photographer: Dana Perrotti)

www.nycfashioninfo.com

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EXECUTIVE SUMMARY
1. Current Situation: NYC Fashion Wholesale Industry
Overview of NYC Fashion Industry Today, the fashion industry is one of the largest and most prominent sectors in New York City. Including fashion retail, it accounts for 6% of the Citys private employment and 175,000 jobs. The industry contributes $10 billion in payroll wages and provides $1.7 billion in annual tax revenue. Fashion is one of the few industries in the City that drives significant direct employment, visitor spending and wholesale sales activity. NYC Fashion Industry Ecosystem The multifaceted New York City fashion industry can be described as an ecosystem with various inter-connected sectors and communities. The wholesale sector, including trade shows, buyers, showrooms and designers among others, is critical to the Citys fashion ecosystem.

2. Economic Impact of Fashion Wholesale Industry

Spending Fashion-related wholesale spending in New York City is substantial, resulting in more than $18 billion in direct spending with New York City businesses. This spending feeds the rest of the Citys fashion ecosystem. On top of wholesale purchases, the average travel-related spending by U.S.-based buyers and visitors (those based more than 50 miles outside the New York Metro area) is a significant $7,031 per visit. International visitors, while a smaller percentage of all buyers, spend an average of $11,903 per visit and are high-end and high-spend visitors compared to average conventioneers. Visits Visits generated by the fashion wholesale sector comprise a substantial part of the overall New York City convention business. More than 578,000 individual wholesale buyers and fashion event attendees visit New York City annually, accounting for 14% of all conventioneers to the City. Fashion buyers are very active when they are in the City. During each trip, the average buyer attends 2.6 trade shows and visits 8.9 showrooms.

3. NYCs Competitive Position

The primary competitive threat to the New York City fashion wholesale industry is the rise of apparel trade shows in other parts of the country, most notably Las Vegas. Buyers are finding that they do not have to visit New York City as often because they can attend comparable trade shows closer to home. This is a long-term threat that needs to be recognized and addressed in order for New York City to maintain its leadership position.

4. Areas of Opportunity
Advanced Scheduling of Trade Shows The study uncovered the need for a more coordinated approach to trade show and event scheduling and for better communication among industry groups. Twenty percent of fashion trade show attendees surveyed indicated they have missed at least one trade show recently because they received information about events too late to make plans. Enhanced Wholesale Information The study also discovered a lack of aggregated information about showrooms and trade shows in the City. In fact, 89% of fashion buyers surveyed said there was no citywide showroom guide with an up-to-date list of showrooms.

www.nycfashioninfo.com

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 Improved Travel Amenities Getting to and from trade shows and showrooms in New York City is considered more challenging than in other cities. Approximately one-third of buyers said that transportation between trade shows, showrooms and hotels in New York City was lacking. Increased Differentiation Some fashion professionals believe that New York Citys overall buyer and visitor experience has become less differentiated from its competitors than it should be given New York Citys many unique assets. Thirty-one percent of fashion buyers said that New York City has become a less important place to attend fashion and apparel events. The most common reasons cited: the cost to attend events in the City; and the rise of other markets and trade shows around the country. To maintain its value proposition, the City and industry will have to offer programs and experiences that cannot be duplicated in other markets. Increased marketing of the value of the fashion industry components to buyers in New York City is also required. Garment Center The Garment Center is a key differentiator for New York City and provides a considerable strategic advantage. Fifty-one percent of U.S. fashion buyers rated the New York City Garment Center as better than similar districts in other cities. What buyers liked best about the Garment Center was the diverse range of designers, including access to international brands. Support for Emerging Designers Helping emerging designers enter and thrive in the industry is seen as a key opportunity for the industry and City. Based on a survey of leading designers, supporting new designer talent was the number one issue identified as very important, critical over the next five to ten years.

5. NYCEDC Initiatives
As a result of these findings, NYCEDC developed and executed initiatives to address the risks and opportunities. Advanced Scheduling of Trade Shows In February 2009, NYCEDC announced the full schedule of 2009 NYC Fashion Market Weeks to allow buyers and exhibitors to plan ahead and schedule trips further in advance. The full schedule can be viewed at: www.nycfashioninfo.com. NYCEDC will be working with the trade show operators and venues to plan 2010 schedules and beyond so that show dates can be announced well in advance. RESULTS 85% of out-of-town buyers are more likely to return to NYC because they know the complete 2009 Market Week schedule 73% are more likely to stay longer Enhanced Wholesale Information In response to the 89% of buyers who said there was no easily accessible database of wholesale showrooms for New York City, NYCEDC launched NYCFashionInfo.com in February 2009. NYCEDC also published and distributed 6,500 NYC Wholesale Guides during the Womens Fall Market Week in February 2009. RESULTS 58% of out-of-town buyers said they were able to visit more showrooms during Womens Fall Market Week because of the new services offered by NYCEDC 84% of buyers kept their Wholesale Guides for future use, with 77% planning to use the guide to find new showrooms; 53% planning to use it to learn about future Market Week dates; and 38% planning to use it to help plan future trips to NYC

www.nycfashioninfo.com

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 Improved Travel Amenities To address buyer complaints about NYC being more difficult to navigate compared to other cities, NYCEDC tested several amenities to enhance the buyer experience at Womens Fall Market Week in February 2009, including: Market Week Express Shuttles between the trade shows, in the Garment Center and Midtown: RESULTS: 81% of buyers said they would be likely/very likely to ride the Express Shuttle again during future Market Weeks Exclusive dining and entertainment deals: RESULTS: 4 out of 5 out-of-town visitors said the Market Week services made their trip easier, more enjoyable and productive Increased Differentiation NYCEDC will be exploring with industry stakeholders additional programming and amenities during NYC Fashion Market Weeks that leverage the talent and unique NYC environment (e.g., unique and varied retail environments) that other cities cant duplicate or match. Garment Center The City is currently working with industry stakeholders on a rezoning of the Special Garment Center District with the goal of maintaining it as the vital core of the NYC fashion industry. Support for Emerging Designers A key need identified by NYCEDC is for better information resources to help young designers navigate NYC as they try to start and build businesses. A key part of the new NYCEDC website, NYCFashionInfo.com, includes comprehensive information to help emerging designers.

www.nycfashioninfo.com

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Chapter One: Current Situation: NYC Fashion Wholesale Industry

Overview of NYC Fashion Industry
The garment and fashion industry began to emerge in New York City in the 1800s. The roots of todays wholesale fashion industry trace back to the 1940s when the first Press Week, the precursor to Fashion Week, was launched and the first fashion and apparel trade shows were held in hotels. Most of the modern trade shows existing today were launched following the opening of the Javits Center in 1986. Today, the fashion industry is one of the largest and most prominent sectors in New York City. In fact, the fashion sector represents 6% of the Citys private employment with over 175,000 jobs. The industry contributes $10 billion in payroll wages and provides $1.7 billion in annual tax revenue. Fashion is one of the few industries in the City that drives significant direct employment, visitor spending and wholesale sales activity. Whats unique about the fashion industry in New York City is that every aspect of the industry is served on a large scale. With over 5,000 wholesale showrooms, no other city in North America comes close to New York City in terms of concentration of fashion and apparel brands and manufacturers. Fashion Week, trade shows and showrooms draw over 578,000 annual visits to the City.

NYC Fashion Industry Ecosystem

The multifaceted New York City fashion industry can be described as an ecosystem with various interconnected sectors and communities. These include design, media, manufacturing, textiles, real estate, retail, higher education, theater and tourism. The wholesale aspects of the industry comprise a critical piece of the Citys overall fashion ecosystem. The wholesale sector includes designers, brands and manufacturers that use showrooms, trade shows, Fashion Week and other fashion events to reach wholesale buyers and media/press from around the world. In a way, New York City can be seen as a giant fashion and apparel marketplace. The challenge and opportunity is that each sector of the industry is interconnected and needs to remain healthy for the entire industry to thrive.

An Interconnected Industry: Segments Served by the New York City Wholesale Fashion Industry

Fashion Week, Fashion Shows

Designers and Brands

Trade Shows, Market Weeks

Showrooms

Manufacturing

NYC Fashion Industry

Tourism Theater and the Arts

Higher Education

Global Trade, Imports & Exports

Fashion Media

Fashion Retail

www.nycfashioninfo.com

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Chapter Two: Economic Impact of Fashion Wholesale Industry

Spending
Spending related to fashion wholesale in New York City is substantial. The fashion wholesale markets impact on the City results in over $18 billion in annual direct spending with New York City businesses. This spending feeds the rest of the Citys fashion ecosystem.

Over $18B in Annual Direct Spending with NYC Businesses

12 10 8 6 4 2 0
Wholesale Spending Adjusted* Visitor Travel-related Spending Showroom and Trade Show Operations

$11.9B

$4.2B $2.7B

*Adjusted Wholesale Spending is calculated by multiplying NYCs total fashion wholesale sales ($38.6B) by average fashion wholesale margin (31%).

On top of wholesale purchases, the average travel-related spending by U.S.-based buyers and visitors (those based more than 50175 miles outside the New York Metro area) is a significant $7,031 per visit. International visitors, while a smaller percentage of all buyers, spend an average of $11,903 per visit. These are high-end and high-spend visitors compared to average conventioneers.

200

150

Out-of-Town Buyer Travel-related Spending

100
Average Travel54 53 related Spending Per Visit
$7,031 $11,903
Film

Location of Buyer Visitor

U.S. International New York City Metro Total

50 Number of Visits
357,460 105,882

Total Annual Travel-related Spending (Bil) 26

$2.5 $1.3 $0.4 $4.2

Total Annual Economic Impact from Travel-related Spending (Bil)

$4.0 $2.0 $0.7 $6.7

114,997 $3,448 Fashion/ Publishing Advertising Fashion Retail 578,338 $7,210 (average)

www.nycfashioninfo.com

: : 10 : :

Visits
Visits generated by the fashion wholesale sector comprise a substantial part of the overall New York City convention business. Over 578,000 individual wholesale buyers and fashion event attendees visit New York City annually, accounting for 14% of all conventioneers to the City. Fashion visitors are unique, as they tend to stay longer, visit the City more often and spend considerably more than typical conventioneers, according to NYC & Company. These visitors are most often wholesale fashion buyers that work for a range of retail companies from the worlds largest department stores to small, specialty boutiques. It is estimated that 82% of New York City fashion visitors are based throughout the U.S. and 18% come from overseas. Trade shows drive the bulk of total fashion buyer visits to New York City, followed by visits to showrooms and Fashion Week.

Total Number of NYC Fashion Visits

Where Fashion Buyer Visitors to New York City are Based

116,000 116,000 169,000 169,000

Trade Shows
293,000 293,000

18% 18%

Showrooms Trade Shows Fashion Week Showrooms Fashion Week

62% 62% 20% 20%

International International New York City Metro Newarea York City (within 50 miles Metro area of (within New York 50 City) miles of New York City) U.S. (at least 50 U.S. miles outside (at least of 50 New York City) miles outside of New York City)

Total visits: 578,000

Note: Chart accounts for out-of-town visits only (578,000). Attendance by NYC residents: Trade Shows = 37K; Showrooms = 89K; Fashion Week = 116K Note: Chart accounts for out-of-town visits only (578,000). Attendance by NYC residents: 242,000

Fashion buyers are very active when they are in the City. During each trip to New York City, the average buyer attends 2.6 trade shows and visits 8.9 showrooms.
21% 21% 20% 20%

Location of Buyer New York City Metro* U.S.** International Total

*Within 50 miles of New York City ** At least 50 miles outside of New York City

Average Annual Visits 5.5 3.3 2.5

59% 59%

Yes; missed a trade show Yes; missed a trade show No No Dont Know Dont Know

4.2 (Average)

www.nycfashioninfo.com

: : 11 : :

The average buyer visits New York City 4.2 times per year to attend fashion trade shows and typically stays 4 days and 3.4 nights. Seventy-nine percent of these buyers stay in hotels in the City. Sixty-nine percent of buyers say they have either increased or maintained their number of visits to the City over the past few years. What buyers like most about New York City is the breadth of the brands and products, the large number of showrooms and retail stores, and the overall uniqueness of the New York experience. New York City also provides the best access to international designers and exhibitors. No other city has the variety of fashion industry resources and tourism-related experiences. Here are quotes from out-of-town buyers on their reasons for coming to New York: It has become more important for us because NYC is considered to be a great place for the newest and freshest fashion. I want the merchandise in my boutique to reflect a wider range of designs and quality to attract my customers to up-to-date fashion. My store is attracting more affluent buyers who need world class choices; New York is a center for the worlds best.

Fashion Week
One of the most visible and important components of the New York City fashion industry is Fashion Week. The two New York Fashion Weeks have increased in size over the past 15 years from approximately 32,000 attendees annually to an estimated total of 232,000 attendees today, of which 50% are out-of-town visitors. Fashion Week visitors include fashion designers, international media and press, senior executives, buyers and others. Citywide, Fashion Week generates $466 million in direct visitor spending per year ($233 million each Fashion Week), leading to $773 million in total economic impact per year ($386 million each Fashion Week).

www.nycfashioninfo.com

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Chapter Three: NYCs Competitive Position

The fashion and apparel industry is vital to the strength of the New York City economy, but the City is facing increased competition from cities around the country. The primary competitive threat is that New York City is being impacted by the trend of regionalization in the trade show industry most prominently by the growth of Las Vegas fashion industry trade shows. Las Vegas events continue to grow their capacity, aided by being easy to access with less costly amenities. This is making it more attractive for buyers in western parts of the country to visit New York City less often. Regionalization has the potential to reduce the Citys prominence as a wholesale destination and could have adverse effects on the overall fashion industry and the Citys economy. This is a long term threat. This threat needs to be recognized so New York City can adapt and maintain its leadership position. Furthermore, fashion buyers and professionals highly value the New York City fashion experience, but 31% of attendees and buyers say that New York City has become a less important place to attend fashion and apparel events over the past few years. The most common reasons for this are the costs to attend events in the City and the rise of other markets and trade shows around the country. In the U.S., besides New York City, the leading cities for trade shows are primarily Las Vegas and Los Angeles. Secondary competitive cities include Atlanta, Dallas, Chicago and Miami. The various quantitative surveys asked industry participants to compare New York City to many of these competitive markets. The tables below provide a comparison of New York City fashion trade show activity with the two primary competitive markets for shows, Las Vegas and Los Angeles.

New York City Leads in the Number of Fashion Trade Shows But Las Vegas Hosts Larger Events
New York City still leads in total number of trade shows, but Las Vegas has grown very large trade shows and draws more attendees and buyers due to larger venues.

Number of Fashion Trade Shows

shows
300
257

market share
13% 13%
257

2% 2%

250 300 200 250 150 200 100 150 50 100 0 50 0

70 33 70
Other U.S. Cities New York City Las 33 Vegas

Other U.S. Cities Other U.S. Cities New York City

58% 58%

27% 27%

New York City Las Vegas Las Vegas Los Angeles Los Angeles

6
Los Angeles

Source: Tradeshow Week

Other U.S. Cities New York City Las Vegas

6
Los Angeles

Fashion 1,500,000
1,200,000 1,500,000 900,000 1,200,000 600,000 900,000 300,000 600,000 0 300,000 0

Trade Shows Attendance Estimates 1,370,911

market share
1,370,911

shows

2% 2%
490,000 300,000 490,000 300,000 24,000
Los Angeles

Other U.S. Cities

40% 40%

36% 36%

Other U.S. Cities New York City New York City Las Vegas Las Vegas Los Angeles Los Angeles

Other U.S. Cities

Las Vegas

New York City

24,000
Other U.S. Cities Las Vegas
New York City

22% 22%

Los Angeles

Source: Tradeshow Week

www.nycfashioninfo.com

: : 13 : :

Buyers on Which City They Consider to be New York Citys Primary Competitor
Buyers
Las Vegas Los Angeles Atlanta Chicago Dallas Paris Miami London Milan San Francisco 50% 22% 8% 7% 4% 4% 2% 1% 1% 1%

NYC Fashion Trade Show Producers Require More Exhibition Space in the City
The primary issue impacting New York City fashion and apparel trade show producers is their demand for more convention and exhibition space. The study uncovered their interest to grow existing trade shows and to launch new events in New York City. If New York City cannot accommodate this growth due to lack of exhibit space and venue dates, there is a risk of losing market share to other cities over time.

Expansion/New Trade Shows Could Drive an Incremental $173M in Annual Travel-related Spending

Number of Expanded or New Shows 24

Average Estimated Attendance 2,000

Total Estimated Attendance 48,000

Travel-related Spending Per Visit* $3,605

Estimated Annual Travel -related Visitor Spending $173 M

Source: NYCEDC Event Producer Survey/Interviews *Conservative estimate = of average direct spending

NYC Compared 39% to Other Cities

35%

NYC is Better

43%

33%

NYC is Worse New York City rates the same as or better than competing cities in most cases, with showrooms providing the most differentiation.
New York City is not significantly differentiated on positive attributes compared NYC is the Same to major competitors. However, showrooms are a positive differentiator for the City. 26%

24%

Buyers and Attendees Rate New York City vs. Competitive Cities
OVERALL VISIT ATTENDING TRADE SHOWS

39% 39%

35% 35%

NYC NYC is Better is Better NYC NYC is Worse is Worse NYC NYC is the is the Same Same

39% 46%

24% 35%

43% 43%

NYC is Better NYC is Better 33% 33% NYC is Worse NYC is Worse NYC is the Same NYC is the Same
24% 24%

26% 26%

26%

30%

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: : 14 : :
24% 24%

NYC NYC is Better is Better

24%

43%

NYC is Worse NYC is the Same

58%

Buyers and Attendees Rate New York City vs. Competitive Cities (continued)
visiting SHOWROOMS roi (RETURN ON INVESTMENT)

24%

11% 24% 39% 43%

NYC is Better 33% 35% NYC is Worse NYC is the Same

26% 24%

NYC is Better NYC is Better NYC is Worse NYC is Worse NYC is the Same NYC is the Same

41% 39%

26% 35%

43%

NYC is Better 33% NYC is Better

NYC is Worse 31% NYC is Worse 58%

33%

30%

NYC is the Same NYC is the Same

24%

26%

sense of safety/security

11%

C is Better

NYC is Better NYC is Worse

39% 58%

35% 41%

24% 26% NYC is Better NYC is Better NYC is Better NYC is Better
31%

24% 46%
43%

C is Worse

46%

NYC is Worse NYC is Worse NYC is Worse NYC is Worse

30% 33%

C is the SameNYC is the Same

26%

NYC is the Same NYC is the Same NYC is the Same NYC is the Same

30%

41%

Buyers and Attendees Rate New York City vs. Competitive Cities on Overall Visit Broken Out by Buyer 24% 26% Location NYC is Better NYC is Better
NYC is Worse
NYC is Better

Location of Buyer NYC Metro

37% 21% 42%

46%

NYC is Worse

NYC NYC is the Same

39% 16% 45%

U.S.
36% 27% 37%

Intl.
30%
23% 27% 50%

33%

NYC is the Sam

NYC is Worse NYC is the Same

In terms of the overall buyer experience, international visitors rate the City the lowest.

www.nycfashioninfo.com

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International International International International New York City New York City New York area City NewMetro York City Metro area Metro area (within miles Metro area 50 (within 50 miles 20% (within 50 miles of New York City) (within 50 miles 20% of New York City) 20% of New York 20% of New York City) City) 62% 62% 62% U.S. (at least Advanced Scheduling62% of Trade Shows U.S. (at least U.S. (at least 50 miles outside U.S. (at least 50 miles outside 50 miles outside The study uncovered the need for a more coordinated approach to trade show and event scheduling and for better communication of New York City) 50 miles outside of New York City) of New York City) they have missed at least one of New York City) among industry groups. Twenty percent of fashion trade show attendees surveyed indicated trade show recently because they received information about events too late to make plans. Addressing this issue could have a significant impact. Increasing the number of buyer visits by 5% could drive $2 billion in incremental travel-related spending over 10 years and a significant increase in wholesale sales.
18% 18% 18% 18%

Chapter Four: Areas of Opportunity

Percentage of Out-of-Town Buyers that Have Missed NYC Trade Shows Because They Were Not Notified in Time

21% 21% 21% 21%

20% 20% 20% 20%

Yes; missed a trade show Yes; missed aa trade show Yes; missed trade Yes; missed a trade show show No No No No

59% 59% 59% 59%

Dont Know Dont Know Dont Dont KnowKnow

Typically, leading fashion trade shows in New York City have had their schedules set less than 12 months before the event. The largest trade shows in the U.S. have venue dates booked many years in advance. For example, the MAGIC Las Vegas trade shows have secure dates booked out twenty years. There is an opportunity to organize and market New York City wholesale Market Weeks to provide consistent schedules and related travel and hotel services. The concept is to bring together multiple trade shows occurring at the same time and market these as one large New York City event. This would turn Market Weeks wholesale fashion activity into an international event, leveraging the power and prestige of both the New York City fashion industry and the City of New York. Developing a more comprehensive Market Week of trade shows and other events would be similar to the branding success of Fashion Week.

Enhanced Wholesale Information

The study also found that there was a lack of aggregated information about showrooms and trade shows in the City. In fact, a significant 89% of fashion buyers surveyed said there was no citywide showroom guide with an up-to-date list of showrooms available. Over 60% of buyers said they would use such a guide to find new products and visit more showrooms, which could lead to a significant annual increase in wholesale sales.

Buyer Survey Question: Is there an easy way to locate up-to-date lists of NYC showrooms?

11%

Yes
89%

No

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Buyer Survey Question: If there were an organized, informative, up-to-date list of showrooms, what would you use it for?
100 90 80 70 60 50 40 30 20 10 0
Find new products by category

63%

62%

6%
Other uses or Visit more showrooms in design requests relevant category

Improved Travel Amenities

The buyer survey found that getting to and from trade shows and showrooms in New York City is considered more challenging than in other cities. This is seen as a competitive disadvantage. Other cities have smaller downtowns and garment districts, but approximately one-third of buyers say that transportation between trade shows, showrooms and hotels in New York City is lacking. A similar percentage of the market said that improved transportation would enhance the visitor experience and make their time in the City more efficient. Other travel amenities and services could include improved signage and showroom guides, restaurant, entertainment and spouse packages, a buyer center and more information about the best ways to move around the City. The goal of improving various travel amenities that enhance the overall buyer experience is to encourage more buyers to visit, stay longer and be more efficient when conducting business in the City.

Buyer Survey Question: What could be done to make your overall visit to NYC easier and more productive?
better transportation
100 90 80 70 60 50 40 30 20 10 0
U.S.-based Buyers International-based NYC Buyers Metro-based Buyers

39% 32% 30%

100 90 80 70
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40 30 20 10

32%

30%

40 30 20 10
18%

33% 22%

Buyer Survey Question: How would you rate your overall NYC experience when you visit for trade 0 0 shows and/or showrooms/marts to the city you marked (as the most competitive NYC)? U.S.-based International-based compared NYC NYC is Better NYC is Worse NYC to is the Same
Buyers Buyers

transportation to/from facilities

100 90 80 70 60 50 40 30 20 10 0
NYC is Better NYC is Worse

Metro-based Buyers

transportation into the city

100 90 80 70 60 50

33% 18% 22%

40 30 20 10
NYC is the Same

27% 16%

31%

NYC is Better

NYC is Worse

NYC is the Same

Increased Differentiation 100

The 90 study uncovered that some fashion professionals believe that New York Citys overall buyer and visitor experience has become less differentiated from its competitors than it should be given New York Citys many unique assets. While it is positive that 80 69% of buyers said that the New York City experience was better or the same as other cities, a long term issue is to focus on those 70 buyers who do not fully appreciate the attributes and opportunities that make New York City the Fashion Capital. According to the buyers survey, 31% of fashion buyers said that New York City has become a less important place to attend 60 fashion and apparel events. The most common reasons for this were the costs to attend events in the City and the rise of other 50 and trade shows around the country. markets

40 30 20 10 0
NYC is Better

16%

31% Buyer 27% Survey Question: Over the past few years, has NYC become a more or less important place to attend fashion and apparel industry events?

NYC is Worse

NYC is the Same

25% 44%

More Important Less Important Same

31%

It is important to point out that New York City is not doing anything wrong. The issue is that competing cities have gotten stronger by investing in convention centers and exhibit halls and by promoting new trade shows that have essentially been brought to buyers in Western and Southern cities such as Las Vegas, Los Angeles, Atlanta and Dallas. In short, the concept has been bring the show to the buyers, instead of bring the buyers to the show. To maintain its value proposition, the City and industry will have to offer programs and experiences that cannot be duplicated in other markets. Increased marketing of the value of NYCs fashion industry components to buyers in New York City is also required.

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Garment Center
There are over 5,000 showrooms in the City that provide wholesale marketing opportunities year-round. These showrooms serve as designer and brand headquarters as well. No other city in North America has New York Citys concentration of fashion and apparel brands and manufacturers. The Garment Center is the showroom core of New York City. The New York City Garment Center is a key differentiator compared to other cities and provides a considerable strategic advantage. Fifty-one percent of U.S. fashion buyers rate the New York City Garment Center as better than similar districts in other cities. What buyers like best about the Garment Center is the diverse range of designers, including access to international brands. They also value the areas strategic location in the heart of the City with its proximity to hotels, restaurants and other attractions.

Buyer Survey Question: How does the NYC Garment District compare to those in other cities?

39% 51%

Better Worse Same

10%

Eighty-eight percent of showroom tenants and owners agree that having a large cluster of fashion and apparel showrooms in a defined New York City Garment Center is important. Also, 43% of showroom owners and tenants say they expect the importance of having a showroom in New York City to increase.

Garment Center Showroom Survey Question: How important is having a large cluster of fashion and apparel showrooms in a defined NYC Garment Center?

12%

Important Not Important

88%

A majority of industry professionals surveyed and contacted during the research phase agreed with the need to focus on strengthening the Garment Center.

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The Top Five Ways in Which the Garment Center Could Be Improved According to Showroom Management
Percentage of Showroom Management Lower cost of renting Add more showrooms to increase cluster in Garment Center Create mart with dedicated trade show space Improve signage, maps and way-finding directionals Establish a visitor or buyer center with computers, bathrooms 90% 52% 52% 47% 47%

Support for Young Designers

Helping emerging designers enter and thrive in the industry is seen as a key opportunity for the industry and City. Based on a survey of leading designers, supporting new designer talent is the number one issue identified as very important, critical over the next five to ten years. The City and the industry collectively need to ensure that the next generation of great American designers is here in New York City. NYCEDC conducted a survey of fashion designers with the assistance of the Council of Fashion Designers of America. The goal was to gather the fashion designer communitys recommendations on how best to promote industry growth and policies to support the industry. The data table below presents some of the findings from this survey.

Major Issues Fashion Designers Feel the City of New York Could Effectively Address Over the Next 5 to 10 Years
Very Important, Critical Providing support for new design talent Providing support for local factories and manufacturing Protecting the cluster of fashion businesses in the Garment Center Helping to market the importance and value of the NYC fashion and apparel industry to buyers, trade show exhibitors and event producers Improving scheduling of Market Weeks/Fashion Week Helping to market NYC Market Weeks/Fashion Week Improving trade show/runway show facilities Other 63% 60% 56% 53% 47% 40% 27% 17%

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chapter five: nyceDc initiatives

As a result of these fi ndings, NYCEDC developed and executed initiatives to address the risks and opportunities.

Advanced Scheduling of Trade Shows

In February 2009, NYCEDC announced the full schedule of 2009 NYC Fashion Market Weeks to allow buyers and exhibitors to plan ahead and schedule trips further in advance. The full schedule can be viewed at: www.nycfashioninfo.com. NYCEDC will be working with trade show operators and venues to plan 2010 schedules and beyond so that they can be announced well in advance. According to a recent NYCEDC survey, 85% of out-of-town buyers are more likely to return to NYC for trade shows; and 73% are more likely to stay longer based on their access to the complete 2009 trade show schedule.

Enhanced Wholesale Information

In response to the 89% of buyers who said there was no easily accessible database of wholesale showrooms for New York City, NYCEDC launched NYCFashionInfo.com in February 2009. The site includes information on all aspects of the industry including a browseable and searchable database of over 5,000 NYC wholesale showrooms a fi rst for NYC. NYCEDC also published and distributed over 6,500 NYC Wholesale Guides during Womens Fall Market Week in February 2009. These guides included the complete listing of all 2009 Market Weeks as well as over 5,000 NYC showrooms. The response to these initiatives has been overwhelmingly positive. During Womens Fall Market Week, 58% of out-of-town buyers said they were able to visit more showrooms because of the services offered. With 84% of buyers saying they kept the guide and 77% planning to use it to fi nd new showrooms, there is the potential to drive additional incremental showroom visits.

Improved Travel Amenities

To address buyer complaints about NYC being diffi cult to navigate compared to other cities, NYCEDC tested several amenities to enhance the buyer experience during Womens Fall Market Week including: Market Week Express Shuttles between the trade shows, the Garment Center and Midtown. Over 2,500 total rides during Womens Fall Market Week. Eighty-one percent of buyers said they would be likely/very likely to ride the Express Shuttle again during future Market Weeks. During Womens Fall Market Week, roughly 4,500 dining and entertainment deals were taken advantage of by attendees. results: Market Week Concierges distributed: 6,500 Wholesale Guides 8,900 Restaurant Week Guides 3,000 NYC Visitor Guides 85% of buyers found these services to be helpful/very helpful.

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The results were positive: NYCEDC will be exploring, in partnership with the trade show operators, these travel amenities during future NYC Fashion Market Weeks.

Increased Differentiation
With industry stakeholders, NYCEDC will be exploring additional programming and amenities during NYC Fashion Market Weeks that leverage the talent and unique NYC environment (e.g., unique and varied retail environments) that other cities cant duplicate or match.

Garment Center
The City is currently working with industry stakeholders on a rezoning of the Special Garment Center District with the goal of maintaining it as the vital core of the NYC fashion industry. As part of this effort, the NYCEDC will partner with stakeholders to develop a strategic plan for the Garment Center to ensure the district has the right services and amenities that will attract designers and buyers for years to come.

Support for Emerging Designers

A key need identifi ed by NYCEDC is for better information and resources to help emerging designers navigate NYC as they try to start and build businesses. Many emerging designers rely on word of mouth to get to the resources they need to start their businesses. A key part of the new NYCEDC website, NYCFashionInfo.com, includes comprehensive information to help emerging designers, including: A sourcing database with suppliers and factories Information on how to start a business Information on design resources and incentive programs Information on undergraduate, graduate and continuing education for fashion

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Visit nycfashioninfo.com. The ofcial source for NYC fashion information.

110 William Street New York, NY 10038 212.312.3600 www.nycedc.com/fashion

fashion@nycedc.com