Blog: Leonie BarrieIs US retail on road to recovery?

Leonie Barrie | 8 February 2010

With January sales at US retail stores showing a marked improvement on the same month last year – even beating forecasts in some cases – the question now being asked is whether the retail sector is finally on the road to recovery?

Better than expected results at many apparel chains and department stores were undoubtedly helped by easy comparisons with last January, when spending fell off a cliff as the recession took hold. And better control of inventories meant they didn’t have to resort to steep markdowns to clear unsold merchandise. Consumer spending in the month even held up despite challenges such as bad weather in many areas.

While all this is good news for the beleaguered sector, analysts warn the recovery is more likely to continue on an uneven path as shoppers only slowly resume spending that was postponed or reduced during the recession. The current first quarter could even be tougher if consumers overspent during the holiday season, they fear.

Tensions of a different kind came under the spotlight in the European Union (EU) last week after China complained about the “unfair” anti-dumping measures taken in December against its leather footwear imports. China wants the issue to be resolved under the World Trade Organisation (WTO) dispute settlement procedure. The European Commission, however, says it took “a trade defence measure” rather than a protectionist one, and that it scrupulously followed WTO anti-dumping rules.

The spat has raised fears that trade tensions with China are likely to escalate in 2010. US rhetoric also links US economic recovery with job creation and trade – but at the same time allocates more funds to trade enforcement.
US: White House unveils more details of export plan
/article.aspx?id=106663

For Marks & Spencer, problems focus on the hiring of new boss Marc Bolland, after his appointment was calculated to cost the retailer GBP15m (US$24m) to 2012. Details have alarmed shareholder groups, and come at a time when big corporate payouts are under intense scrutiny.

Many stock market flotations were abandoned or postponed in the global economic downturn, but there have been some signs of rekindled interest. Most notably, fashion retailer New Look has launched its much-anticipated IPO (initial public offering), aiming to raise GBP650m (US$1bn) to cut its borrowings and grow the business through traditional retail channels and on the internet.


BLOG

US border tax a contentious issue

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...

BLOG

Primark's sustainable cotton programme takes shape

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...

BLOG

Trump administration starts to shake up trade

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...

BLOG

Likely shifts in the sourcing landscape in 2017

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...

just-style homepage



Forgot your password?