Blacks Retail Report

Luxury Apparel
May 2007

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Table of Contents

• The Big Picture
• Early Fall
• Footwear Update
• Blacks Bottom Line

 

The Big Picture

Economic growth may have slowed in the first quarter but economists aren’t ready to abandon ship just yet. Despite a downturn in consumer spending, a number of economic drivers are on the upswing, promising greater growth ahead.  Low inventory levels should lead to production increases, businesses are investing some of their profits from recent quarters and U.S. exports are on the rise, due to the weak dollar.

Early Fall

While the mixed economy has made it tough on some retailers, the good news is that we’re entering the early fall season. If this season looks anything like last fall, there will be reason to celebrate. Last year, better retailers had some of their strongest sales in the early part of the season. Blacks predicts a similar performance this year, driven by unique, luxe merchandise. 

Early fall merchandise, such as collections and fall goods in warm-weather fabrications, have already landed and now is the time to get rid of slow moving spring/summer goods. You don't want them hanging around through the dog days of summer.

Large, national merchants have already started their promotions with “pre-sales” of 30% to 50% off. The first markdown is the most important so make sure your reductions are adequate.
The outlook for early sales of men’s wear is good, since men are more accustomed to buying merchandise at the beginning of the season and waiting to wear it. Women’s wear may be a bit slower, but business should pick up when stores start promoting the new specialty collections.

Footwear Update

Women’s shoes are being driven by a strong skirt and dress trend so we’re seeing a lot of sandals and high heels. High-heeled boots should make a splash in fall.

Men’s shoes are less seasonal and more dependent on the replacement cycle, so retailers in the better men’s footwear category are having a harder time. The good news is that men are making fashion statements with seasonal dress boots. Blacks expects demand for great boots in the fall.

The sneaker market is facing a downturn due to its close ties with the denim market. Consumers are buying less denim and opting for other bottoms, such as skirts, that require different footwear. Luxury footwear is the sector’s bright spot since luxury is not driven by necessity, but by fashion.

 

Blacks Bottom Line

 Prepare for early fall sales by taking adequate markdowns on spring/summer goods.