Blog: Leonie BarrieA spring wardrobe…in January?

Leonie Barrie | 6 January 2006

I’ve been fortunate enough to have sufficient holiday in hand to extend my Christmas and New Year break by a few days – so today is the first time I’ve been back at my desk for a while. If you’re like me, it usually takes a time to get back to speed after taking a break from work – but for once the usual post-Christmas lull doesn’t seem to have happened and it appears that we’re already in full flow again. I’m frantically trying to get up to scratch on events that have taken place during my absence, but retailers are already filing reports of their sales results – and profit forecasts – for December, and it looks as though the doom and gloom that many were predicting hasn’t happened after all.

Last-minute discounting helped retailers such as Aeropostale, Abercrombie & Fitch, Chico’s and Limited Brands to rev up December sales – but equally impressive are the positive profit outlooks from companies despite their aggressive holiday season promotions. Even Gap, which posted a disappointing slide in same-store sales as a result of continuing problems with its merchandise mix, is standing by its year-end profit estimate.

However, there’s been less to shout about for retailers targeting low income shoppers. Wal-Mart blamed a disappointing December for its downbeat fourth quarter profit forecast, although if it’s any consolation for the companies concerned then analysts agree that the pinch of higher winter energy costs is the culprit here, causing consumers to watch their spending.

More markdowns are likely to be on the cards to help pump up post-holiday sales – or for those planning their wardrobes far enough ahead then why not shop for spring merchandise? There are plenty of new opportunities out there…and in the dead of winter no less! It might be an obvious way for retailers to boost their year-end profits by enticing shoppers to buy new full price merchandise rather than the discounted holiday dregs – but is there any real sense in shopping for a bikini or silk tunic in sub-zero temperatures? I’m sure this policy backfires too, by over-exposing shoppers to the new trends too soon – so that when they’re ready to buy spring items in a couple of months’ time there’s little left that’s new and exciting. And so the cycle begins again, with retailers having to roll out their winter woollies in August. Me? I'm still trying to get back into the daily swing of things...let alone plan what I'll be wearing in six months' time!

US: Retailers' December 2005 sales roundup


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