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New vows needed in retailer/supplier marriage

NEW YORK — Retailers and suppliers need to bring about a dynamic change in their relationship, moving from an adversarial model, where the two battle on price and distribution, to one in which each views the other as a strategic business partner, said Liz Claiborne Chairman and CEO Paul Charron at the NRF annual meeting.

Citing a possible 15 percent drop in prices when quotas limiting imports from China expire in 2005, Charron said inefficiencies in the supplier/retailer relationship must be eliminated if companies are to offset the drop by increasing sales volume. Such a drop in price can only be overcome, he said, if the two parties truly serve each other's needs.

He noted that situations which put stress on the relationship — such as when retailers develop their own product lines that compete with supplier goods, or suppliers open their own retail stories that compete with their retail customers — need to be resolved through discussion and win-win arrangements.

"Retailers don't want to see the same brands they are carrying at three different spots in the mall," said Charron. "We closed some Liz Claiborne stores because we couldn't compete with our own lines in the department stores. Suppliers need to develop exclusive offerings with their retailers."

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