Blog: Leonie BarrieBlack Friday a bargain bonanza

Leonie Barrie | 21 November 2011

As US retailers head towards Black Friday - the busiest shopping day of the year - at the end of this week, they can take some comfort from commerce department data showing sales at clothing stores rose 5.8% in October compared to last year. But while the numbers suggest American shoppers are continuing to spend, October's figures dipped 0.7% on the previous month.

Meanwhile, other data forecasts Black Friday shoppers will increasingly use social media and the internet to pinpoint discounts and promotions this year. A new survey by the National Retail Federation expects around 152m people to shop over the three-day weekend, up more than 10% on last year's total of 138m. But more than half will wait to see if the bargains are worthwhile.

A mixed bag of earnings results released last week included profit falls at Gap Inc, Abercrombie & Fitch, Perry Ellis and Destination Maternity, whilst gains were seen at Target, Limited Brands, Foot Locker, Children's Place, Wet Seal and Shoe Carnival.

Unseasonably mild weather and pre-holiday promotions also hurt UK sales of winter merchandise at clothing retailers, according to official figures released last week, with year-on-year sales volumes falling by 1.0% at stores selling clothing and footwear. As if this wasn't bad enough, they are being warned to expect flat sales this Christmas, with no sustainable uptick in business likely until 2013 at the earliest.

Faced with continuing uncertainty in the eurozone, teen apparel retailer Abercrombie & Fitch is adamant its international growth plans remain on track despite seeing a softening in its European business. International revenues rose 56% in the third quarter, but lagged behind the 74% gain seen in the second quarter. The firm also says it intends to raise prices at its US stores to try to mitigate the effects of higher costs.

But with more and more own label apparel retailers eyeing growth in Asia and Latin America to make up for shortfalls in their domestic markets, will a business formula that's running out of steam at home still work abroad?

French luxury and sporting goods group PPR believes its "green" profit and loss accounts will serve as a catalyst to develop a more sustainable business model, as well as giving it a competitive edge. The initiative, which was spearheaded by its Puma brand earlier this year, will now be rolled out across all of its labels by 2015 to provide a monetary valuation of the environmental impacts of its business operations and supply chain.


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