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Retailers See Potential in Growing Latino Population

May 19, 2003|Anne D'Innocenzio | Associated Press

NEW YORK — Hallmark Cards is marketing 2,500 greeting cards for Latinos, close to double the number of a year ago, and Blockbuster Inc. has posted bilingual signs and stocked video rentals in Spanish in nearly a quarter of its stores.

Kmart Corp. has a fashion line named for the Mexican pop star Thalia, a bid to woo young consumers. And Sears, Roebuck & Co. plans to unveil Lucy Pereda, a line of dressy women's clothing bearing the name of the Cuban-born TV lifestyle personality.

With overall sales languishing, retailers are hoping to give their business a boost by pursuing the fastest-growing segment of the U.S. population, Latinos.

Many merchants have sought out the Latino customer for years. But the overall industry found after the release of the 2000 census that it had underestimated the size of the Latino population, which had surged by 58% to 35.3 million during the 1990s, with the largest numbers concentrated around Los Angeles and New York. The nation's Latinos represented an opportunity for retail sales growth.

"The census was very key," said Deidre Parkes, a Hallmark spokeswoman. "We knew we needed to increase our efforts."

But which strategies will work with Latinos remains to be seen.

David Wolfe, creative director at Doneger Group, a buying office in New York, believes that much of this spring's fashion trends -- including the explosion of bright colors and lots of ruffles -- is the result of the Latino influence on the American mainstream.

"It is colorful and flamboyant and sexy ... exactly the opposite of the minimalist fashion that killed fashion in the 1990s," Wolfe said.

In a testament to Latino power, the fashion line J.Lo by Jennifer Lopez, named after the entertainer, is among the standouts in teen departments of major stores.

"This was never geared toward Latinos, but the fact that J.Lo is of Latino descent has helped," said Denise Seegal, chief executive of Sweetface Fashion Co., which produces the line.

Some experts in Latino marketing still are wary of retailers' efforts, saying they need to pay attention to the differences within the Latino population, including their nations of origin and the parts of the country where they live.

"Some of them [retailers] get it, and some don't," said Aida Levitan, president of the Assn. of Latino Advertising Agencies, which works with U.S. firms to promote products to Latinos.

Cathy Areu Jones, a 32-year-old Vienna, Va., resident and publisher of Catalina, a lifestyle magazine geared to Latino women, believes "companies are just throwing spaghetti to the wall. They think that one size fits all."

Jones said fashions needed to address Latino consumers' different body shapes, and the designs and advertising shouldn't perpetuate the stereotype of a sultry-looking Latina.

"I have a hard time finding clothes for myself," said Jones, who said she needs clothes that are tailored at the waist but more forgiving at the hips. All she sees in the stores, she said, is "the American cut."

And she doesn't wear the latest trends in fashion, such as ruffles and bright colors, because she believes they perpetuate the Latino stereotype.

Cindy Pino, 28, from New York, agrees, noting that retailers should notice that "we are different physically."

"I have a hard time buying jeans," she said. She added that she also is turned off by what she believes is marketers' focus on Spanish-speaking Latinos. She says companies also should pay closer attention to someone like her, a first-generation Chilean American.

Major retailers including Kmart said they were working to get the fit right. Retailers also said they have done extensive research to find out the preferences of Latino consumers.

For example, J.C. Penney Co. is the dominant retailer for an apparel line aimed at Latino men called Havanera, which offers relaxed clothing produced by Perry Ellis that features drawstring pants and embroidered detail. The product reflects research that shows that Latino men are keen on rich details in their apparel, said Christi Byrd Smith, a Penney spokeswoman.

Blockbuster has studied its Latino customers in different parts of the country and tailored its stores to meet their tastes.

Pete Wei, vice president of field marketing and customer segments at the video rental company, said that at its stores in San Antonio, Latino consumers preferred to communicate in English. Consequently, those stores have fewer videos and signs in Spanish.

"They behave like Americans and Texans," Wei said.

But in its Southern California stores, Blockbuster is bringing in more films in Spanish from Mexico, because that is where the demand is.

At stake for retailers is Latinos' immense buying power, expected to balloon to $926.1 billion in 2007, up dramatically from about $580 billion in 2002, according to the Selig Center for Economic Growth at the University of Georgia. That far exceeds the growth in buying power of non-Latino consumers.

According to the latest report from the Labor Department, Latinos spent more in 2001 on groceries, furniture, children's clothing and footwear than non-Latinos because they have larger families on average.

They're also relatively youthful. Though 25.7% of the U.S. population was under 18 in 2000, 35% of Latinos were younger than 18, according to the 2000 census.

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