Blog: Leonie BarrieUS shoppers finally hit the stores

Leonie Barrie | 11 July 2011

While cold weather, storms and flooding dampened demand for spring and summer merchandise in May, US apparel retailers rebounded with a better than expected performance in June after a combination of lower gas prices, sunshine and deep discounting encouraged shoppers to hit the stores.

Retail same-store sales showed growth at specialty apparel, department and luxury stores, helped by promotions to clear inventories of summer lines to make way for back-to-school ranges. But after a month largely driven by discounts, the worry now is that retailers will need to continue to offer deals to entice back-to-school bargain hunters - and that promotions will eat into second-quarter earnings.

Groups representing US apparel retailers, brands and importers are increasingly frustrated at  delays to the long-pending US trade deals with South Korea, Colombia and Panama. While Washington last week came one step closer to passing the pacts, a clash with Republicans over an aid programme for US workers threatens to stall their progress once again.

Meanwhile, US clothing retailer Gap Inc is considering sourcing women's swimsuits, activewear and men's suits in Colombia and possibly Brazil, according to insiders familiar with the company's plans. Exploratory talks are said to be underway with several potential partners, and could mark a return to Colombia for Gap after it ended a denim manufacturing contract last year to shift output to a lower cost partner in India.

The US Consumer Product Safety Commission (CPSC) has set a new federal safety rule for drawstrings in children's outerwear, formalising long-standing voluntary guidelines into a mandatory standard. The new rules apply to children's upper outerwear in sizes 2T through 12, with neck or hood drawstrings, and children's upper outerwear in sizes 2T through 16, with certain waist or bottom drawstrings.

Over in the UK, sporting goods retailer Sports Direct has bought a majority stake in two fashion firms - West Coast Capital (USC) and Cruise Clothing - in a deal worth GBP7.0m (US$11.2m). The move will help position the retailer more up-market, but also gives it new ammunition to take on rival leisure sportswear retailer JD Sports.

Three years ago industry observers forecast that product lifecycle management (PLM) software would be a make-or-break investment for the apparel industry. That was before the global economic slowdown of course, but software suppliers remain confident the tools are even more relevant today as firms seek to save crucial time and money in their sourcing, supply and inventory activities. See this month's management briefing from just-style to find out more.


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