Modular Puts Shape Back in Fashion Profit : Southland and U.S. Wrapped Up in New Look, but Imitators May Unravel Trend

Back in 1974, a student at Los Angeles’ Fashion Institute of Design and Merchandising devised a line of inexpensive, one-size-fits-all knit jackets, skirts, pants and tops that could be worn separately, in layers or any which way.

But classmates booed the shapeless garments, and student designer Sandra Garratt put her “modular” idea on a shelf. Years later, after working for several Beverly Hills and New York designers and then moving to Dallas, Garratt caught the fancy of Texas shoppers with her malleable designs, and now her line has spawned a host of competitors nationwide.

Suddenly, the clothing is becoming a bright spot in an otherwise lackluster business. In the past several months, modular garment boutiques have sprung up throughout Southern California and the nation in malls and department stores, and dozens more are planned.

“If something’s hot, the nature of the business is that everyone hops on it,” said Gary J. Groesbeck, sales manager of Serbin Sport in New York, which has a modular line called Switches. “(But) it has to pass the acid test, which is time.”

In December, for example, J. C. Penney completed its purchase of Units, a company founded by Garratt that is speedily rolling out the unusual clothing in compact specialty stores nationwide. Meanwhile, a new line by 36-year-old Garratt called Multiples is being offered in more than 300 department stores, including Bullock’s, Bloomingdale’s and Macy’s.

And a flock of smaller competitors have surfaced, with lines such as Linkup, 26 Designs, Bubbles Plus and Symmetry that are inexpensive and easy to produce and provide healthy profit margins.

“We’re only in the business eight months, and it’s far exceeding any of our expectations,” said Sy Blonder, owner of Linkup, a Los Angeles manufacturer of modular garments sold in specialty and department stores. “Women are coming in and buying an outfit or two and then coming in the next day and buying more.”

Retailers and apparel makers say they would welcome a hot concept now, given customers’ resistance to high clothing prices and uninspired designs. During Christmas in particular, many merchants complained of tepid sales of women’s ready-to-wear.

But even as the potential for quick profits is inspiring loads of competition in “modulars,” some fashion observers are predicting that the rapid proliferation will prove the look’s undoing.

“I don’t think it’s going to last,” said Marjorie S. Deane, publisher of the Tobe Report, a New York-based newsletter for fashion retailers. “It’s our belief that customers will get bored with it.”

The concept is simple. The collections, which are U.S.-made, consist of moderately priced ($10 to $45) components made of a cotton-and-polyester knit fabric in solid colors or stripes. The pieces, packaged in individual plastic bags and displayed in bins, can be worn together--often three, four or more per outfit. They can be layered or bunched or knotted or cinched in at the hips with a wide knit band.

Brochures feature sketches of tops, skirts, pants, jackets and accessories and examples of how to put them together. One model is shown in a dress worn upside down, with the sleeves serving as pant legs. Although most lines advertise the garments as one-size-fits-all, some have also developed petite and large-size components. (Most customers are women, even though the garments are billed in many cases as unisex.)

At the 700-square-foot Units stores that are popping up in malls across the country, salespeople called “stylists” wear the clothing and offer tips to customers on how to achieve their own styles.

The look takes some getting used to for customers geared to more traditional, structured garments. There are no mirrors in the dressing rooms, a not-so-subtle way of forcing customers out into the store so that the salespeople can go to work, demonstrating how to twist a sleeve here or knot a jacket corner there to create a distinctive look.

‘Two-Year Excitement’

“We encourage people to come out so that we can work with them,” said Johnnie Woods, manager of the Units store in Century City Shopping Center & Marketplace. The store has found that customers serve as a magnet for passers-by, who observe the goings-on through floor-to-ceiling windows.

To Marj Oppenheimer, a Los Angeles image consultant who shops at Units, the store represents “the way of buying clothing in the future.” She has spent more than $100 for four garments and plans to buy more. Her husband, architectural photographer Kent Oppenheimer, finds the store design “tempting” and “wide open.”

“I think the flexibility of (the clothing) intrigues women,” said Walter F. Loeb, an analyst with Morgan Stanley & Co., a New York investment house. “It requires superb salesmanship and therefore will be successful as long as they have well-qualified, highly trained people. As I see it now, it’s a two-year excitement.”

Deane, the New York fashion consultant, is convinced that the concept will not have staying power, despite its current popularity. “It’s dependent completely on a person-to-person relationship” between customer and demonstrator, she said. “It’s one more proof that the customer out there is anxious to be told what to do.”

Deane figures that customers will get frustrated trying to recreate the look at home after having had a “theatrical presentation” in the store. “When you get it home and try it on in front of your own mirror, I think it’s going to fall flat,” she said.

Don C. Rhoden, a former fast-food restaurant executive who is president of Units, acknowledged having concerns that the fashion might prove fleeting. But, he said, the chain “has evolved even in the last two years. We have given the people what they want.”

Frequently, he noted, new styles or hemlines are inspired by customers’ comments, and domestic production enables Units to turn new designs around quickly. To provide variety for steady customers, the stores feature “limited-edition” garments at slightly higher prices.

Designer Garratt, who spent much of her youth in Southern California, did not originally intend to build a large national chain when she first got the Units concept going in Dallas in the late 1970s. A shop she opened in a loft became a word-of-mouth success, and her tiny staff could not keep up with demand.

Investors who had recognized the line’s potential approached her in late 1985, offering to provide capital to expand the company. On Jan. 1, 1986, she incorporated the concern under the name Stinu (Units spelled backward) and was named president. Despite what Garratt considered a “good contract” with the investors, the two sides soon disagreed on strategy and within three months she was gone.

She contended that she was “muscled out.” The Stinu investors said the parties simply disagreed over how fast to expand the business.

Eventually, Garratt accepted $35,000 in return for her share of the company and her Units designs. But the agreement allowed her to start another business using the same concept.

“In one respect, it’s wonderful that something you create becomes so popular,” she said. “The other side is that you don’t get any benefit from that.”

Early last year, Jerell Inc., a Dallas apparel manufacturer, approached her about starting a new modular line. The result was Multiples, which Garratt said has profit margins of 35%, compared to 20% on many other garments.

At Bullock’s, a test run of the line in two stores last fall was so successful that the chain rolled it out to 20 stores within two months.

“We’re very aggressive when we believe in something,” said Sally Pearson, vice president and general merchandise manager for the Southern California department store chain. Bullock’s finds that customers range from juniors “up to any age.”

Designer Expects Knockoffs

“You see people with alligator handbags buying it,” she said. “It really is something that can be . . . either traditional or contemporary. I have no fear that it’s a flash in the pan.” She acknowledged, however, that “there will be a lot of knockoffs and imitations.”

Garratt isn’t having the last laugh yet, but for now her line has surpassed Units’ by a long shot. Revenues from Multiples’ adult apparel and a new children’s line are expected to reach $300 million at retail by year-end, and the company plans to expand into Canada, Britain and other foreign markets.

Units, meanwhile, expects to have 150 stores in about 30 states by year-end, up from 48 now, with projected sales this year of $57 million.

Is it a flash in the pan? Not in Garratt’s view.

“It was based on solid economic principles,” she said. “Those things aren’t going away. Labor costs are not going to go down. (The clothing is) a dream on the production end and very service oriented on the customer end.”