Thursday, November 4, 2010
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Clothing Retailers Hoping for Green Christmas The holiday sales forecast for clothing retailers is the merriest it's been in three years, but there still are reasons for merchants to have nightmares before Christmas, according to a panel of fashion and financial experts. "Surprise, surprise -- there is fashion newness out there and it is selling," said David Wolfe, creative director of the Doneger Group consulting firm. Wolfe predicts that it will be a "pretty healthy fashion season for a lot of retailers," but he cautioned that the hottest trend retailers will have to worry about is price cuts, as competitors try to snag recession-wary consumers. "We are going to see a price-feeding frenzy among retailers," Wolfe said. Analysts Kimberley Greenberger and Michelle Clark of Morgan Stanley agreed, saying that could hurt profit margins at apparel retailers. The retail experts issued their predictions last Friday at the Retail Marketing Society's annual holiday conference, held at the Fashion Institute of Technology in Manhattan. The event was attended by close to 100 retailers and industry professionals. Greenberger also warned that apparel retailers face stiff headwinds this holiday season from the calendar and the weather forecast. Christmas this year falls on a Saturday, "the worst day in the retail calendar for the holiday to fall" according to Greenberger, because stores will lose their busiest shopping day of the week. A Saturday Christmas, Greenberger said, could have a negative effect on comparable store sales -- sales at stores open at least a year -- of 1 percent. Morgan Stanley is predicting holiday same store sales will increase by an average of 2.5 percent. The other headwind retailers need to worry about, Greenberger said, is a weather forecast for a warmer than normal December. Weather Trends International is predicting it will be the warmest December in four years, she said, which could hurt sales of sweaters and other winter clothes. One piece of good news on the weather front, however, is that December is expected to have 58 percent less snowfall than last year, which will help stores avoid snow closings. Richard Berner, chief U.S. economist for Morgan Stanley, said continued decline in home prices, increased consumer saving and continued concerns about unemployment will restrain spending this year, although spending levels will improve compared to 2008 and 2009. Wolfe said some of the fashion trends that are expected to sell well for Christmas are waterfall cardigans (women's sweaters where the front of the sweater is longer than the back and creates a cascade effect), dresses, fur vests, fashion boots and novelty leggings. (Source: The North Jersey Record, 11/01/10) Click here to email to client
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