Blog: Leonie BarrieConservative fashions won't drive sales

Leonie Barrie | 14 August 2009

Let's face it, nobody needs another pair of jeans or another T-shirt. Indeed, industry observers have long bemoaned that fact that there are no strong fashion trends around at the moment to drive apparel and footwear sales – and the fact that shoppers are buying anything at all is largely due to markdowns.

Are there any signs this might change sometime soon? Not according to Liz Claiborne CEO William L McComb, who shed some light on retail thinking in a conference call earlier this week.

He said department stores “have told us that they want a stronger presence of both replenishment and seasonal key items from historically proven winning product categories like cut and sew knits, sweaters, and pants.

“In general they are looking for more basics as they are taking very conservative approaches to fashion.”

And this is despite trials carried out by the company through 43 shop-in-shops that are selling to a younger clientele, with more fashion items than before, and average unit revenues that are “significantly higher than we’ve seen in years.”

Surely, if this is typical retailer response to the product and merchandising mix, then an uptick in profits is going to be a long way off.

Compare this with the formula already proven by the likes of Zara, H&M and Topshop, which shows providing consumers with what they want and fast, and reducing margins to keep prices down, can still generate sales when times are tough.

Interestingly, McComb also casts doubt on whether lower inventories are going to help retailers boost their profits.

He points out that strong unit volume sales last year were driven by aggressive promotions to clear inventory. But with stock levels this year lower than ever, “we are not banking on a material rebound in pricing to cover the lost units.”

 

INSIGHT: Liz Claiborne must move from cuts to margin growth


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