Stifel believes holiday apparel sales grew by a “modest” 1-3%

Stifel believes holiday apparel sales grew by a “modest” 1-3%

Holiday apparel sales increased by as little as 1% in the US, with higher online spending offsetting continued weakness at bricks and mortar stores.

Stifel analyst Richard Jaffe said holiday apparel sales had grew by a “modest” 1-3%, attributing its cautious outlook to limited newness in apparel trends, a continued shift to spending in other categories such as electronics, and external headwinds, including weak mall traffic and a highly promotional environment – all predicted to have a negative impact on fourth-quarter results.

More positively, the analyst highlighted lean inventories, an extra selling day versus 2013, and more favourable weather – which he said should benefit margins, limiting the need for the “reactionary deep discounting” seen a year ago.

The winners in the current environment, it added, would include companies competing effectively on price, such as Wal-Mart, Macy’s, Kohl’s and TJX Companies. 

Stifel said retailers had begun promotional activity a week before Thanksgiving this year, pulling forward the Christmas shopping season as a result.

But he added that retailers had been “more strategic” in their promotions this time, helping to preserve margins as inventories remained relatively lean.