Blacks Retail Report

Luxury Apparel
September 2006

Table of Contents

The Big Picture
Fall Finish
Spring Start
Blacks Bottom Line

The Big Picture

Recent economic indicators are mixed, but there seems to be enough good news to keep consumers spending. Consumer confidence rebounded in September, thanks to falling oil prices and a strengthening labor market. Concerns over housing and inflation remain, but for now they've been put on the back burners.

With a hazy economic outlook, retailers are setting moderate expectations for the holiday season. The National Retail Federation predicts a 5% sales increase in November through December sales compared to the same period in 2005. Last year, retailers saw a 6.1% jump in holiday sales, which was actually higher than the 10-year average.

Fall Finish

September sales were so-so for most retailers, following strong demand for early fall merchandise in July and August. Despite the lull, we expect this season to shape up nicely due to the overall strength of fall assortments. Quality fabric blends and safe colors should make this season's menswear appealing to customers.

Clothing has made a decent showing, ticking up over 11% in August, according to Blacks's exclusive data. We're also seeing strong trends in sport coats and luxury pants. Sport shirts are outpacing knits, but sweaters are picking up as the weather gets cooler.

Sales of furnishings have been soft, down almost 2% in August. Given the strong run they had over the last 18 months, this is not too surprising. Fashion belts continue to perform well, complementing the strong pants trend.

Menswear buyers are currently facing their Sept. 30 and Oct. 15 completion dates on final fall goods. If more than 20 percent of your on-order is still outstanding, it's time to take action - demand a discount from your vendor or cancel the order if you can.

Spring Start

In womenswear, spring markets have just opened up and buyers are off to Europe. We expect dresses and skirts to continue to lead the trends. Designers are showing large floral prints on dresses, and proving that leggings still have swagger.

In accessories, belts are thick, shown cinching up short dresses, or as thin counterpoints on highwaisted pants. Big bags and platform heels complete the spring look. Sales of women's accessories have surged, showing a 22% sales increase in August, according to Blacks's data.

The color palette continues to play in black, white and gray, with shots of neon colors such as electric blue and hot pink.

Blacks Bottom Line

Seize the margin opportunity that comes with managing your balance of fall on-order deliveries.

Retail Report