Blog: Leonie BarrieEasy comparisons lift sales

Leonie Barrie | 12 April 2010

Spring has finally sprung for US retailers after a combination of factors pulled together in March to lift same-store sales for the seventh month in a row. Everything from the weather to an earlier Easter holiday and improved consumer confidence lured more shoppers into stores - while easy comparisons with last year helped too.

Crucially the results were strong across all formats, with all areas of apparel in positive territory. They also show consumers are continuing to shop for discretionary items like clothing and make some of the purchases they avoided during the recession.

But of course it still remains to be seen whether this momentum continues, since the Easter boost to March revenues is likely to come at the expense of April sales. And there's still a long way to go before sales levels return to the highs of 24 months ago.

Strong clothing sales in the final quarter of the year have also been welcomed by UK retailer Marks and Spencer (M&S), but it warned full-year profits are likely to be lower than last year. The retailer last week said it has seen market share increases for its women's wear, lingerie, men's wear and children's wear, but that international sales have dipped.

International growth is high on the agenda at Swedish fashion retailer H&M Hennes & Mauritz AB, which kicked off its financial year with a 42% jump in first quarter profit, helped by strong sales of its spring fashions and an early Easter. It has also seen a strong start to its second quarter, with same-store sales up by 9% in March. 73 new stores are planned for the next three months, mostly in the UK, China, Norway, Denmark and Germany.

Asian markets such as China, Hong Kong, Korea and Singapore are the focus for expansion at Fast Retailing Co, operator of the Uniqlo casual clothing chain. Japan's largest clothing retailer also raised its full-year forecast after first-half profit leapt 56% to JPY55.3bn (US$594m) on sales that rose 31.8%. Results were helped by innovative products like the Heattech heat-retaining thermal underwear, sales of which nearly doubled to 47m pieces.

UK supermarket chain Asda, meanwhile, has taken steps to reassure shoppers about the conditions in which its clothes are made by installing cameras in its Bangladesh supply factories. Customers are able to view working conditions live using the internet. The move comes after Asda last year said it would consult shoppers more on how its stores are run - but also follows concerns about workers in low-cost apparel supply chains.

With just days to spare, the US and Brazil managed to negotiate a settlement to a long-running dispute over cotton subsidies - in a move that heads-off a series of retaliatory measures against American goods. As part of the agreement, the US will set up an annual assistance fund of $147.3m.


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