Unseasonable weather dampens apparel sales

Unseasonable weather dampens apparel sales

With retailers already starting to showcase their spring apparel lines, the heavy and unexpected blanket of snow currently sitting over parts of Europe and the US is set to hit sales hard. Small wonder then that specialist companies are now making an enticing offer: let us give you detailed weather predictions for your company – and watch your revenues and earnings rise as a result.

There’s nothing we Brits like better than discussing – at great length – the vagaries of our generally less than wonderful weather.

But an unwanted cold snap or rainy spell can be disastrous if you’re an apparel retailer with the wrong stock profile in your shops.

Take as an example the Christmas trading recently reported by UK retailer Marks and Spencer.

At first glance, the figures looked steady enough, particularly in the current economic climate, but they met with a lukewarm reaction from analysts.

Why? In no small part because the weather had been cold in the run-up to Christmas – and they felt M&S, traditionally strong in knitwear and outerwear, should have capitalised on the snow and ice to deliver stronger sales.

Detailed weather predictions
Small wonder then that specialist companies are now making an enticing offer: let us give you detailed weather predictions for your company – and watch your revenues and earnings rise as a result.

In this way, a number of apparel and footwear companies on both sides of the Atlantic have used self-styled business weather intelligence provider Planalytics to help manage the impact of weather on their businesses – among them Debenhams, Payless Shoesource, Levi Strauss, Hanesbrands, New Look, Clarks and Ann Taylor Factory.

The system is an adaptable one, changing in accordance with the needs of the individual customer.

In the case of Ann Taylor Factory, the company was offered an initial 12-month view – or Vision – of weather trends to aid assortment planning and allocation.

Autumn looks warmer than last year? Then you might want to hold off on marking down those T-shirts and shorts.

An early cold snap in winter? Then make sure you have strong outerwear inventories ready to go in time.

There’s no one size fits all solution here.

Time to react
Ann Taylor Factory’s SVP, planning and allocation, Catriona Van Dyck, found in 2008 that detailed plans for the next two to four weeks were not giving the company enough lead-in time to react and adjust its strategy.

“Timing is crucial,” she told just-style. “We needed to have the information in a more timely manner – six weeks or four weeks wasn’t enough for us from a store planning point of view.”

But two months out was more realistic, they found.

Similarly, Planalytics drew up a kind of “weather map” of Ann Taylor Factory stores, zoning each one according to climatic conditions.

The company could have split its approximately 100 stores into 50 of these zones or “climate buckets” – but with a small team, Van Dyck chose to keep it simple and use a far simpler, four-bucket breakdown.

Nonetheless, where Planalytics and companies of its ilk can come into their own is with a retailer that has multiple locations across a broad geographic base – in other words, where the weather might be mild and sunny at one store location, but cold and wintry at another.

Forecasting ahead
Colin Laker, VP of merchandise services at Canadian apparel retailer Mark’s Work Wearhouse, admits he was “sceptical” when he first heard about the Planalytics claims, but says he has since found their forecasts to be “pretty accurate”.

The company has several hundred stores right across Canada, making inventory planning potentially complicated and necessarily a long-term exercise.

Nonetheless, using a nine-month timeframe, the company had time to react, talk to its buyers and allocate stock to stores accordingly.

So, when Planalytics predicted a warmer summer, Laker delayed the usual markdowns on men’s shorts, electing to wait for the anticipated hot weather.

The result was a strong inventory when the heat hit, enabling better sales than in the year before (and at higher prices).

And he also moved an additional 8,000 pairs of shorts out to stores in Calgary, Vancouver and the west of Canada, after hearing from Planalytics that the weather would be warmer out there.

All were sold, clearing C$200,000 (US$189,000) in the process.

Of course, no system is infallible, and the biggest caveat in all of this is the simple accuracy of the predictions.

The fact remains that no weather forecaster on earth can claim to be 100% right 100% of the time.

“Weather has a huge impact on your business, but it’s one of a number of factors and right now in the macro-environment I think we have to really keep that in mind,” says Van Dyck.

Indeed. Our Meteorological Office here in the UK promised us a “barbecue summer” in 2009, followed by a relatively mild winter.

Writing as someone who endured a soaking holiday in Wales during July, and who was practically snowbound just after Christmas, I’ll be taking all weather forecasts with a very heavy pinch of salt for the time being – however useful their potential impact on the retail industry.