Blog: June's retail washout
Leonie Barrie | 13 July 2009
US retailers are still struggling to shake off the recession, with June sales of summer fashions mired by wet weather, fears of unemployment halting discretionary spending, and none of the tax rebate cheques that helped boost purchases last year.
Most worryingly, perhaps, the weak sales cut across all formats, from discounters to department stores. Target Corp and JC Penney both saw sales slide, but raised their second-quarter guidance; while Abercrombie & Fitch, Children's Place, Limited Brands and Gap all disappointed with slumping same-store sales. At the luxury end of the market, Neiman Marcus sales tumbled 20.8%.
June marks the start of summer clearance as retailers try to make room for autumn merchandise. And with most consumers still seeking out bargains or basics, it is likely they are stalling any purchases in preparation for steep discounts in the sales – and that retailers will have a tough time for most of the summer.
With no sign of an uptick in sight, there are also worries about the back-to-school season – the second-biggest shopping period of the year.
In marked contrast, Japan’s Fast Retailing has lifted its full-year forecasts after profits for the nine months to May jumped by 24%, helped by better-than-expected sales at its low-cost Uniqlo casual clothing brand. Net income rose to JPY49.6bn (US$534m) thanks to a 17.2% year-on-year hike in net sales to JPY537.0bn. The company's core Uniqlo stores in Japan - which account for around 80% of total revenues - saw sales rise 22.8% in the three months to May.
And UK sportswear retailer JJB Sports hit the headlines for all the wrong reasons after it emerged the company's executive chairman had received a GBP1.5m personal loan from Mike Ashley, the owner of arch rival Sports Direct. The loan raises questions of possible conflicts of interest - but JJB said the money was for business rather than personal use.
Meanwhile, loyal shareholders in Marks & Spencer voted to keep Sir Stuart Rose running as its chairman until 2011, flouting plans by rebel shareholders to bring about changes in the company's corporate governance strategy. The vote took place at the retailer’s AGM in London last week. M&S has faced criticism for appointing Sir Stuart as both executive chairman and chief executive – with critics arguing it is against corporate governance guidelines. However, it seems unlikely the issue will be dropped.
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 – Kohl's, L Brands
- 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