Luxury Apparel - July 2008
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The Big Picture
 Despite continued inflation fears and falling home prices, consumer confidence managed to inch back up in July. The Conference Board’s consumer confidence index rose from 50.1 in June to 50.9 in July, reportedly due to the recent stabilization in gas prices. GDP for the second quarter also rebounded, notching up 1.9%, thanks to temporary relief from tax refunds.
On the broad horizon, retail sales and food services were up 0.1% in June over the previous month, according to data recently released by the U.S. Department of Commerce.
Here at Blacks, we saw more dramatic fluctuations among our specialty retailers as menswear continued to slip and women’s wear rebounded.
June Wrapup
Menswear fell 9% in June, with some of the biggest losses coming from sportswear and furnishings. The only category that made strong gains was outerwear and jackets, which jumped 11%. We predict that outerwear will continue to be a top performer as men look beyond sport coats and soft jackets to more traditional layering.
While men’s struggled, women’s wear surged 8% on the strength of new merchandise. Dresses continued to pop, along with accessories. Sales indicate that good female customers are still ready to buy as soon as new merchandise flows in.
Men seemed more hesitant to make purchases, even with the lure of new goods. This will probably change later in the season, as men realize that they have no new items for fall/winter. Until then, men’s wear merchants will have to hang in there. .
Spring Plans
Men’s buyers are just back from the Spring ’09 shows in New York and we are hearing positive talk about the new merchandise. Vendors are trying to spur interest through the use of saturated colors and it’s working. Expect a brighter spring next year, and an influx of new spring jackets.
The bad news from the shows is that prices have ballooned once again, putting the squeeze on merchants who specialize in European goods.
Fall Strategy
As we move further into the fall season it’s important to realize that customers are still interested in new merchandise and great items. It doesn’t matter what categories the items are in, as long as they have pull power.
In this environment it’s critical to have new goods flowing in on a regular basis. You need to feed the small group of core customers who are looking for something new. If you land all your goods at once, you give them nothing to look forward to.
Blacks Bottom Line
It’s all about the flow. Keep your customers happy and cash flow in line by regularly flowing new goods.
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