Blog: A dismal December
Leonie Barrie | 9 January 2009
As expected, US retail sales took a major hit in December after heavy discounting and promotions largely failed to halt slumping sales and cut into margins instead. Indeed, a wave of profit warnings suggests there is little likelihood of any sort of rebound for the sector in the first half of 2009.
But not only was the weak economy, threat of job losses, and tighter credit to blame for consumers cutting back on all but the most essential purchases: severe winter weather in some regions also hampered traffic.
And while some shoppers tried to out-smart retailers by waiting until the last minute to make their purchases in the hope of getting even bigger discounts, post-Christmas bargain hunters spent too little, too late.
Of course there were some winners on the results front, but these were few and far between. American Apparel, The Buckle, Aeropostale and Urban Outfitters are among those who saw their same-store sales rise in December.
Among the losers though, Gap, J Crew, Abercrombie & Fitch, Limited Brands, Target Corp all cut forecasts.
Perhaps the biggest surprise came from discount giant Wal-Mart, which disappointed with a same-store sales rise of just 1.7% falling short of expectations, and lowered its fourth quarter profit forecast. Until now its results have held up as cash-strapped consumers trade down to its stores.
Macy's went a step further, cutting its fourth-quarter and full-year earnings outlook and revealing plans to close 11 underperforming stores.
There’s more bad news looming for January, when sales are unlikely to get their traditional holiday gift card lift.
And perhaps an even bigger challenge will be to get shoppers to pay full price again. After all, they’ve became accustomed to prices being slashed over the past couple of months and could well start to expect discounts as the norm, especially when they know retailers have spring merchandise they’re desperate to shift.
Fresh from their disappointment at seeing the Trans-Pacific Partnership (TPP) free trade deal abandoned last month with an executive order by President Donald Trump, the US apparel and footwear sector...
With the ultimate aim of ensuring all the cotton in its products is sourced sustainably, value clothing retailer Primark is adamant that having a business model focused on offering the lowest prices o...
Last week we marked the inauguration of Donald Trump as the 45th president of the United States by taking a closer look at what's at stake for the textile and apparel trade – especially his promises t...
Continuing our look at what lies ahead for the apparel industry and its supply chain in 2017, the panel of industry experts consulted by just-style last week tackled likely shifts in the sourcing land...
- China leads US apparel sources with falling prices
- Hard hit Turkish industry is not knocked out
- Vietnam grows share of US apparel imports in 2016
- "Power of the many" drives change at Otto Group
- US apparel sector braces for potential cost hikes
- US Q4 in brief – Nordstrom, Carter's, Kohl's
- Bangladesh crackdown has cost garment sector $100m
- Adidas and Burberry recognised for sustainability
- Inditex and H&M boycott Dhaka Apparel Summit
- Macy's will "do the right thing", says Lundgren
- When Things Go Wrong - A Practical Guide to Managing Common Problems in Apparel Sourcing
- Outdoor performance apparel 2016: A broader perspective
- Technical textile markets: product developments and innovations, December 2016
- Southeast Asia strategic sourcing review – a focus on Cambodia, Vietnam and Myanmar
- Global market review of lingerie – forecasts to 2022