July sales a mixed bag for US apparel retailers
July's results shed little light on US shoppers' back-to-school spending plans
Lured by warm weather and deep discounts as stores cleared their summer merchandise, US shoppers hit the malls in July giving an overall boost to many apparel retailers - but the results shed little light on back-to-school spending plans.
While apparel was one of the few sectors to continue to show gains, the figures were also mixed, perhaps reflecting tough price competition in certain channels and diverging spending among upper and lower income shoppers.
Retail same-store sales cooled from a strong June to 4.8% growth in July as spending showed renewed signs of duress, according to Kantar Retail. Yet while this was softer than the 7.1% same-store sales gain last month, it still beat the 2.9% gain in July last year.
Figures from MasterCard Advisors SpendingPulse, which follows retail sales across all payment forms, showed sales at specialty apparel retailers continued to do well, rising 6.2% over July last year and slightly better than the year-over-year results for May and June.
The SpendingPulse Luxury Index (which includes luxury sales at high-end restaurants, food stores, department stores and general apparel categories but excludes jewellery) showed 11.6% year-on-year growth - the largest increase since April 2010.
Among the winners with better-than-expected same-store sales gains for July were Limited Brands, Abercrombie & Fitch and Hot Topic. Saks, Nordstrom and Macy's Inc, parent of the Bloomingdale's stores, all cater to higher-income shoppers and saw sales rise as a result.
"Most interesting in these numbers is that many retailers are reporting decent gains in apparel sales, which is a discretionary category that is often the first to suffer from the economic strains on shoppers' confidence and spending intentions," said Kantar Retail senior economist Frank Badillo.
"That discretionary spending, however, is undoubtedly falling off most among lower income shoppers hurt most by rising prices and a weak job market."
Not to mention growing concerns about the economy. While action last week saw a last-ditch deal to raise the US's $13.4 trillion debt ceiling, new figures from the US Commerce Department raised the spectre that the country is heading for a second recession after consumer spending in June fell for the first time in almost two years.
And the decision on Friday (5 August) by Standard & Poor's to downgrade the US credit rating by one notch to AA+ is likely to eventually raise borrowing costs, not only for the US government, but for companies and consumers as well.
With gasoline now costing around $1.00 more per gallon than a year ago, shoppers have less money in their pockets to spend or save.
And their spending power is likely to come under fire from another quarter too, as the higher cost of cotton, other raw materials, transport and labour in items sourced over the past six months or so finally shows up in higher ticket prices on garments landing in stores now and through the second half of this year.
In fact, just in time for the all-important back-to-school and holiday selling seasons.
While it's still too early to gauge the trend for the looming back-to-school sales period - the second-largest selling season after the holidays - there are fears that consumers will continue to postpone purchases in the hope of more discounting as term-time nears.
The National Retail Federation expects back-to-school spending in the US will change little from last year as customers shop around for bargains and focus on buying only what they need. Its annual survey forecasts families will spend $603.63 on back-to-school supplies including clothing, within a few dollars of last year's $606.40.
What should apparel firms have learnt from the upheaval of the past couple of years - and what should they be doing now if they want to remain competitive into the future? Buyers and manufacturers nee...
Premium and value were the big winners as US retailers reported their all-important December sales results yesterday (5 January)....
Post-holiday discounts helped many US retailers lift their sales in January, according to monthly figures released yesterday (2 February), but overall results were mixed as many consumers shopped caut...
The following is a general roundup of US apparel and shoe retailers' January 2012 sales results....
Few incoming CEOs have put their stamp on their new company as quickly as JC Penney's Ron Johnson. His former life as head of retail at Apple is evident in the title of the new strategy for the ailing...
US department store retailer Macy's has named Alberta Ferretti as the next fashion designer to take part in the designer capsule collection series for the retailer's contemporary 'Impulse' department....
- Marks & Spencer to extend mobile phone monitoring
- China tightens on corporate social responsibility
- Outdoor industry's future must be more inclusive
- Factoring: a lifeline for apparel suppliers?
- Asos FY profit drop: What the analysts say
- Adidas "Reebok sale" would be admittance of defeat
- Cambodia clothing factory collapse injures eight
- H&M and The North Face commit to responsible down
- Bangladesh taps factory inspectors ahead of review
- Coats to open new zip factory in Bangladesh
- Ethiopia – the emerging textile and clothing industry
- Apparel Market in China to 2018 - Market Size, Trends, and Forecasts
- Global market review of denim and jeanswear – forecasts to 2020
- Wool in the 21st Century: new prospects for a familiar fibre
- Prospects for the Textile and Clothing Industry in Vietnam