Blog: Leonie BarrieChristmas fashion sales soar

Leonie Barrie | 11 January 2010

More figures released over the past week continue to show just how brightly the retail sector shone over Christmas. December same-store sales for US firms positively sparkled, thanks to a flurry of last-minute shopping activity – with some estimates suggesting total sales were 2% higher than the same period last year.

There’s no doubt performance in what is probably the most important month of the year for the sector has been helped by strong comparisons with a dismal festive season in 2008, along with deep cuts in inventories to try to avoid discounting to shift unwanted stock and maintain profit margins.

Yet there are still doubts as to whether the sector has finally turned the corner. Even though many firms raised profit forecasts, there are worries shoppers will now return their focus to saving money, especially while uncertainties remain in the jobs market.

And while firms are clearly better prepared to profit in months to come, having taken time to refine their merchandise assortments that match shoppers' more prudent mindsets, retailers will have to continue to work hard to win the battle for subdued customers.

Festive sales figures show UK retailers, too, have had a Happy Christmas.

Department store chain John Lewis posted a 15.8% rise in total sales for the five weeks to 2 January, driven by a 22% jump in demand for its fashion lines. Fashion retailer Next lifted its profit forecasts after sales in the 22 weeks to Christmas Eve rose 4.6%. And at M&S, clothing was the best-performing category, helping drive a 2.6% uplift in group sales for the 13 weeks to 26 December.

Value fashion retailer New Look also enjoyed a 5.9% jump in UK like-for-like sales in the 14 weeks to 2 January. And designer fashion brand Ted Baker Plc booked a 19.1% hike in retail sales over the festive period.

But while the signs are that strong sales have also continued into the New Year, retailers continue to cite caution for 2010.

Over in Japan, clothing operator Fast Retailing Co Ltd raised its full-year forecasts after surging sales at its Uniqlo cheap casual clothing chain helped lift first quarter profit by 57.2%. Same-store sales at its Uniqlo stores in Japan rose 20.8% in the quarter, with customers lured away from rivals with innovative lines like Heat Tech underwear which uses heat-trapping fabric, and neo-leather jackets.


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