Blog: Weak economy worries persist
Leonie Barrie | 24 May 2010
Several US clothing retailers last week posted stronger first quarter earnings, helped by rising sales and margins. The results were, of course, boosted by cost cuts, tight control of inventories, and easy comparisons with weak sales last year - and many firms cautioned that the still weak economy is likely to hamper consumer spending going forward.
Top line growth across all its brands prompted clothing specialist Gap Inc to raise its earnings guidance for the year ahead after posting a 40% jump in first quarter profit. Crucially, the company continued to build upon the momentum in North America, and said it is now in a strong position to execute on its international and online investments.
Wal-Mart Stores was among those warning of a challenging sales environment in the US after posting another fall in same-store sales in its domestic operations.
The retail giant said customers are still worried about their personal finances, unemployment and higher fuel prices as it booked a 1.4% drop in first quarter same-store sales at its US Walmart chain. It also admitted that apparel was one of its biggest underperformers in the first quarter.
Los Angeles-based American Apparel is never far from the news, but last week caught the market by surprise when it posted a somewhat stunted trading statement, sending its shares tumbling. The firm not only reported a slump in same-store sales for the first quarter - but also says it may have trouble complying with the terms of an existing loan.
The company, which doesn't expect to file its earnings until the end of next month, saw operating losses widen to $17.6m from a loss of $3.9m last year. And while first quarter sales rose 6.6%, its same-store sales fell 10%.
Over in the EU, the row over anti-dumping duties on leather footwear imports from China has taken another turn after a World Trade Organization (WTO) dispute panel was set up to deal with the spat. China has complained the anti-dumping duties breach global rules and says the way the EU has collected the anti-dumping duty has been discriminatory.
Confirmation that digital supply chains are top of mind for apparel industry executives came last week with the latest plans from global sourcing specialist Li & Fung....
As a barometer of the issues top of mind for apparel sourcing executives, it is hard to beat the annual Prime Source Forum in Hong Kong. ...
Over the past month, Donald Trump and his team failed to offer any clear plan to ensure Americans would "Buy American, Hire American" - while the British government's attempts to clarify the specifics...
The Bangladesh government was forced to respond late last week to pressure over its crackdown on labour activists after a number of global brands and retailers, including H&M and Inditex announced pla...
- No US rush to Myanmar despite end to sanctions
- Using worker surveys to drive supply chain change
- Where does VF supply chain sit in growth strategy?
- Investment continues in Ethiopia clothing sector
- Rana Plaza four years on – Timeline of change
- Driving ban intensifies Myanmar logistics hurdles
- Amazon wins on-demand apparel manufacturing patent
- Trump bolsters "buy American" with executive order
- Start-ups chosen to re-think fashion industry
- Inditex, Adidas and Patagonia top ethical report
- Global market review of denim and jeanswear – forecasts to 2022
- When Things Go Wrong - A Practical Guide to Managing Common Problems in Apparel Sourcing
- Southeast Asia strategic sourcing review – a focus on Cambodia, Vietnam and Myanmar
- Myanmar - ISA Country Report
- Clothing Market in the Top 5 American Countries to 2021 - Market Size, Development, and Forecasts