Blog: Leonie BarrieJuly boost for apparel retailers

Leonie Barrie | 8 August 2011

Lured by warm weather and deep discounts as stores cleared their summer merchandise, US shoppers hit the malls in July to give a boost to many apparel retailers.

While apparel was one of the few sectors to continue to show gains, the figures were also mixed, perhaps reflecting tough price competition in certain channels and diverging spending among upper and lower income shoppers. 

There's also the question of the looming back-to-school sales period - the second-largest selling season after the holidays. And signs that discretionary spending is starting to fall off suggest shoppers will continue to postpone purchases in the hope of more discounting as term-time nears.

Spending could also take a hit from the higher cost of cotton, which is set to show up in ticket prices on garments landing in stores now and through the second half of this year. While figures released last week forecast costs of the raw material will continue to decline as production increases help replenish stocks, fashion retailers are also beginning to predict that clothing prices should peak by the end of this year. But just-style has learnt this is not the end of the story.

Faced with energy shortages and power disruptions in their home market, not to mention an unskilled labour force, rising borrowing costs and anti-industry policies, Pakistan's apparel makers are taking matters into their own hands - including plans to relocate businesses to countries like Bangladesh, Dubai and China.

There was also good and bad news last week from administrators handling the sale of discount department store retailer TJ Hughes. A deal to sell four shops to Lewis' Home Retail Ltd is expected to save 442 jobs - but another 22 stores are set to close in the next two weeks, leaving 1,061 workers without jobs.

And on the corporate responsibility front, collective activity in the clothing sector has risen to a new level this year. On the one hand the Sustainable Apparel Coalition has been set up to tackle environmental and social issues, while on the other there have been moves to address the commercialisation and sexualisation of children. This month's just-style management briefing takes a closer look.


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