Bullock’s Takeover Has Some Apparel Makers in a Tizzy

Around the California Mart, the heart of the Southern California apparel business, the great hemline debate of 1988 has been supplanted by a far hotter topic: the imminent takeover of Bullock’s by R. H. Macy & Co.

“It’s the most talked about situation I’ve ever seen in my 24 years in the garment center,” said Allen B. Schwartz, owner and president of ABS California, a Los Angeles sportswear maker. “It’s like nauseating, already. I’ve never seen one thing create such insecurity and turmoil throughout the marketplace.”

What has many California clothing manufacturers in a tizzy is the prospect of losing a prominent department store customer--Bullock’s--that has been gung-ho on locally designed and produced garments.

Macy’s, some manufacturers fear, poses a triple threat once the $1.1-billion takeover of Bullock’s, Bullocks Wilshire and I. Magnin is official, probably today or Tuesday.

It is based in faraway New York, it plans to select merchandise for the Bullock’s stores from faraway Atlanta, and it is a strong proponent of private-label merchandise--garments designed and manufactured only for Macy’s. For some Southland apparel makers, that spells disaster.

“People are very nervous,” said Sidney Morse, general manager of the California Mart--the downtown Los Angeles wholesale garment center where manufacturers show their lines to retailers.

“They expect to experience a great reduction in volume done with Bullock’s, which had been a mainstay of many in the manufacturing community here.

“Every one of the tenants that I’ve spoken to feels they will be significantly affected by the change of ownership,” he said.

To be sure, not all clothing vendors are viewing the changeover with fear and loathing.

A Puzzling Decision

“I have had an excellent business at Bullock’s,” said Helga Westfall, West Coast sales manager for the Ellen Tracy line of women’s apparel. “But we also have an excellent business with Macy’s. I don’t think we fear anything in that respect as far as our product is concerned.”

She does confess to be puzzled, however, about Macy’s decision to make most of its buying decisions for its new Southern California chain in a city that is far distant in both climate and attitude from Los Angeles.

“I don’t understand personally how anybody can buy for the West Coast out of Atlanta because California is so different,” she said. “As long as they can find a way to handle that, then things are fine.”

For others, however, the change of ownership is a cause for much gnashing of teeth.

David Plummer, a Los Angeles maker of sportswear under the Eclipse label, has “over the years done an awful lot of business with Bullock’s.” But six years ago he took his line out of Macy’s because of disputes over payment and terms.

“Macy’s is one of the tough merchants in the whole world,” he said. “They’re awfully powerful.”

Macy’s recently disclosed that it designs and finds its own manufacturers for at least 30% of its apparel, up from 5% to 10% five years ago.

In some sportswear categories, industry sources say, as much as 60% is Macy’s own. And Chairman Edward S. Finkelstein has indicated that he intends to expand the use of private label, which is more profitable.

Some Are Unconcerned

“Macy’s believes strongly in the private label concept but also believes in working closely with (important) national brands,” a Macy’s spokesman said. “They are far from mutually exclusive.”

Some of the more prominent California designers profess to have relatively little concern that Macy’s focus on private label merchandise will mean a decline in business.

“My first reaction is (it’s) great . . . because the Macy’s corporation is our largest purchaser,” said Jessica McClintock, a San Francisco designer. “We make such a specialized kind of product that Macy’s has said they don’t like to private-label what I do because it’s too difficult.

“I don’t make a simple dress with one fabric. My dresses require lots of ornamentation . . . and a lot of production headaches that I can’t imagine them wanting to touch with a 10-foot pole,” McClintock said.

She added that the change will tend to affect “more of the manufacturers who do what everybody else does.”

Soviet-born Leon Max, who calls Los Angeles home, figures that Macy’s will not attempt to compete with the more innovative designers.

“Private label should be done on the commodity level for main-floor merchandise that is very predictable,” he said. “We’re a designer company.”

But, he noted: “It’s no secret in the industry that the department stores nickel-and-dime the manufacturers to death. Their margins are lower than specialty stores’. The problem that could come up is since (Macy’s) is so highly leveraged, they have to cut costs.”

As for Schwartz of ABS, he expects to suffer some sort of volume reduction once Macy’s comes to town even though he does good business with the company’s New York, New Jersey and San Francisco divisions.

“Those guys (at Bullock’s) had a goal and really went for it and frankly achieved it--to turn Bullock’s into the No. 1 fashion image store in Southern California,” Schwartz said.

“They forfeited a lot of the moderate business, which was a very extreme position to take. It was a brilliant and very nervy decision, and they came out smelling like a rose.

“As far as Macy’s goes, good luck. They have to get their feet wet in this town. The consumer is wondering which way they’re going.”