Blog: Leonie BarrieUS shoppers fail to be derailed

Leonie Barrie | 5 September 2011

US retailers weathered a number of storm fronts in August, with a solid start to the back-to-school shopping season helping to mask the impact of higher prices, growing concerns about the economy, and a hurricane that battered the East Coast. Indeed, instead of derailing consumers, August sales were well ahead of last year - although trends are masked all the other 'noise' in the market.

While the hurricane may boost next month's results by shifting into September some sales that would have taken place in the last few days of August, they are likely to be more promotional - which may take its toll on retailers' upcoming margins.

Meanwhile, Liz Claiborne is to sell its loss-making Mexx business to a joint venture in partnership with private-equity firm The Gores Group as part of plans to reduce its debt. The apparel and accessories company will get an 18.75% stake in the joint venture and US$85m - a move that will still allow it to "participate in the long term growth potential of Mexx."

Sporting goods giant Adidas has become the latest company to win praise from environmental pressure group Greenpeace for pledging to eliminate the release of hazardous chemicals throughout its supply chain by 2020. And fashion retailer H&M has joined the Fair Wage Network initiative as part of its efforts to promote fair wages for workers across its global supply chain.

But Vietnam's textile, garment and footwear industries are likely to be hardest hit by a government decision to increase minimum wages by up to one-third from 1 October in a bid to help workers cope with surging levels of inflation and reduce the likelihood of strikes. The move brings forward a pay rise that had been planned for 1 January 2012.

Apparel retailers and brands are already closely scrutinised on corporate social responsibility issues across their supply chains - but a new law coming into force in January adds another dimension to the accountability of large retailers and manufacturers trading with the US state of California. The California Transparency in Supply Chains Act will require firms to disclose their efforts to eradicate slavery and human trafficking from their product supply chains.

Garment sizing and fit can also be a major challenge for clothing manufacturers. Not only do they change in line with the population's expanding waistlines, but as more and more firms start selling internationally they need to adapt their ranges to new markets. The September management briefing from just-style looks at the issues - and discusses how 3D technology can be used to help designers, pattern makers and even online retailers to increase sales and reduce returns.


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