The Big Picture
The U.S. economy grew at a slower rate than expected during the second quarter, rising an anemic 1%. And after the debt ceiling debacle and subsequent stock market roiling, some still fear if it were headed for more significant slowdown. However, retail sales beat expectations in July and consumer spending was up 0.8%, after a 0.1% decline in June.
At this point it’s hard to say how August sales will fare, given the psychological effects of the stock market uncertainty, and Hurricane Irene, which put a damper on weekend sales up and down the East Coast. We believe at best August retail sales will come out even, but we are holding steady with our prediction of a positive fall season.
July sales came out of the gate much stronger than unexpected, with women’s wear racking up a 10% gain for the month, and menswear posting a 9% increase, according to Blacks’ trends.
In men’s, casual pants and jeans took the lead, growing over 20%, followed by sportcoats, sport shirts and special order. The only categories to see declines were suits and neckwear, which is no surprise for this time of year.
In women’s wear, special order led the gains, followed by dresses, which continue to be a strong summer category, growing 23%. Accessories were nearly flat, growing just 1% over last year.
(For more in-depth trends, see our Trends-by-Class page.)
With such a strong July, we expect August sales to come in much slower, especially given the external shocks we faced during the month.
So far, early fall collections are selling well and we expect sales to increase as the weather begins to cool. It’s important that you have all of your fall promotions in place now, and have a varied set of promotions, not just focusing on price points.
Work on your trunk shows and in-store events because you really need to make the most of the season given that we expect spring to be weaker. We’ve gone through two years of spring growth, and in a typical retail cycle we expect to see slower growth in the third year. With that in mind, women’s wear buyers should adjust their plans accordingly as they head to market next month.
While we could face more financial shocks this fall, it’s important that you focus on your numbers alone. We’ve seen plenty of growth even through the downturn, so as long as you stay focused on the trends within your business, you should be able to navigate the changing climate.
Black Bottom Line
A new season and new opportunities are in front of you, so make sure you have all your promotions in place.
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