Blacks Retail Report

Luxury Apparel
September 2007

Table of Contents

• The Big Picture
• Forward Into Fall
• Holiday Strategy
• Blacks Bottom Line

The Big Picture

While investors cheered the Fed’s half-point interest rate cut earlier this month, economic indicators have been mixed. New home sales fell 8.3% in August yet consumer spending was up 0.6%, outshining expectations.
Despite the cloudy economic environment, apparel retailers posted decent gains in August. Sales were up 7.1% over last year but down 0.1% from July, according to the U.S. Commerce Department.

Foward Into Fall

Fall business has been good so far, particularly in the men’s business. Women’s is seeing a slight fall off, perhaps due to the continued summer-like weather.
“We expect to see a small, single-digit increase in apparel sales for September, mainly because we’re working against some strong numbers from last year,” said Blacks Senior Consultant Steve Pruitt.
The economic slowdown may be causing some trepidation in the market but product looks better than ever.
Cashmere continues to be the strongest seller at price points of $300 and up. Knitwear is also selling well, along with the all-star performing Dress categories. Novelty outerwear is showing positive signs but it remains to be seen whether it will get cold enough for heavy goods to sell at strong margins.
The item to own at the New York Fashion Week tents was the Miu Miu black leather bag and European buyers tell Blacks that Croc Bags with Boots are must haves in Euro fashion capitals.
“We expect a resurgence in Bag sales after two seasons of weakening demand,” Pruitt said.
Retailers who have been working on feeding the Buy Now, Wear Now trend should evaluate their current sales to fill in the balance of their open-to-buy (OTB) with in-demand goods.

Holiday Strategy

With the holiday season just around the corner now is the time to get your marketing plan in place, including an online marketing plan. E-commerce has become a big part of holiday shopping and while most brick-and-mortar retailers don’t sell online they should at least have a strong online presence. This means a clean Website detailing who you are and how to find you, and the ability to send personalized, high-quality emails to your core customers. If you don’t have these tools in place already, now is the time to start!.

Blacks Bottom Line