Luxury Apparel - June 2008
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The Big Picture
 The economy continued to soften in June, further putting the pinch on retailers. May data from the Conference Board showed that consumer confidence fell to its lowest level in 16 years. Oil prices continued their upward climb in June and the stock market took a hit, dropping below the 12,000 watermark.
But despite the doom and gloom, our data shows that there are still pockets of opportunity where retailers and vendors are doing well.
June Trends
Sales of menswear slid 7% in June while women’s wear fell just 2%, according to Blacks exclusive trending data.
Women’s was buoyed by strong sales of dresses and accessories, and both men’s and women’s saw strength in special orders. Women’s special orders skyrocketed 81% while men’s saw a 13% gain.
Sales of sport shirts, jeans and casual pants declined, indicating that consumers don’t feel that they need to replace these traditional summer goods. In fact, summer promotions have been a disappointment for many retailers. The good customers bought summer wear early and at full price, and the discount buyers don’t seem to be shopping, no matter how steep the markdown.
We’ve seen full size runs of $400 Prada shirts at Barneys marked down to $89, with very few takers. Have international price jumps finally outpaced demand? These price increases are hitting every category from Chinese Cashmere and European Tailored Merchandise to Casual Footwear and Active Sportswear. Thankfully, early fall goods have begun to land, giving advanced customers a reason to return.
Fall Plans
Like it or not, retailers can’t control weak demand curves. What we can do is listen closely to the customers; they will lead us to the next great items and trends. Now is the time to concentrate on the things that you can control: cutting costs, smart buys, even inventory flows and your ability to listen for future trends.
For fall, we predict strength in outerwear, and a move away from jackets. Knits should also perform well and we’re seeing some great shoes with vintage details.
Steady your operations through fall and wait for the uptick that will come with holiday buys.
Blacks Bottom Line
It’s too late to respond to what’s happening today. Your focus should be strong future planning.
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