Blog: US retail sales see underlying uncertainty
Leonie Barrie | 20 February 2012
January sales for many US retailers built on the momentum of a strong holiday shopping season, with gift card redemptions, discounting and promotions helping to drive sales during the month, according to figures released last week.
Data from the US Commerce Department showed total sales edged up 0.4% in January from the month before, and were 5.8% higher than the same month last year. Sales at clothing stores were flat with December, but 5.3% higher year-on-year.
Despite growth in consumer spending in what is traditionally a slow sales month, commentators warn this will only be sustained by improvements in key economic indicators, such as housing and employment.
For apparel giant VF Corporation, new acquisition Timberland helped lift its fourth quarter profit by 34% - and is slated to contribute $1bn in revenue growth during 2012. But slowing growth in the eurozone markets and the impact of high product costs on gross margins may lead to some cooling of profitability in the early months of the current year.
T-shirt and underwear maker HanesBrands says its decision to raise prices three times over the past year in response to rising input costs "worked well" in its core business, and that retailers "have come to appreciate that price increases are driving their comp sales and profitability." The company, which has just reported a 25% jump in full-year profit, said it continues to earn new shelf space at retail.
But fashion retailer Abercrombie & Fitch saw its fourth quarter savaged by a perfect storm of all-time-high cotton costs, unusually warm weather both in the US and in Europe, and a highly aggressive promotional environment.
And apparel maker Perry Ellis is reviewing its brand portfolio and streamlining its operations to "eliminate less productive overhead," after warning that increased discounting is likely to hurt its fourth quarter and full year profits. The company expects to report an increase in revenues, but this momentum will be eroded by retailers requesting later deliveries of goods, and an increase in markdowns.
Meanwhile, US department store retailer JC Penney Co and luxury marketer Ralph Lauren Corp have decided to end a five-year agreement to sell the exclusive American Living lifestyle line. The collection, which is designed by Ralph Lauren and sold through JC Penney stores, will finish after the spring/summer shipments.
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...
This week our focus turns to first thoughts from a panel of industry experts consulted by just-style on the challenges and opportunities likely to face the apparel supply chain in 2017, with prospects...
Welcome back after the holiday break, and from the team here at just-style I’d like to wish all our readers a happy and prosperous New Year....
Apparel sourcing is a complex process built on a mix of location, logistics, lead-time, price, compliance, risk and reliability. And it's in a constant state of flux as retailers, brands and manufactu...
- Trump and the apparel industry – Infographic
- Apparel factory auditing is in the firing line
- How US border adjustment tax could affect apparel
- British Brexit plans prioritise tariff-free trade
- NRF 2017 – Technology key to shopper experience
- Brands need to tackle Turkey factory refugee abuse
- New project to digitalise European fashion chains
- Patagonia launching circular economy platform
- JC Penney to roll out hundreds of Nike "shops"
- Auditing "in need of reinvention" says new project
- Outdoor performance apparel 2016: A broader perspective
- Southeast Asia strategic sourcing review – a focus on Cambodia, Vietnam and Myanmar
- Anti-odour clothing: fresh fashion for an active lifestyle
- Global apparel markets: product developments and innovations, October 2016
- Global market review of lingerie – forecasts to 2022