Although April retail sales came in surprisingly well—with major retail chains reporting an 8.9% surge—we expect spring sales to slow earlier than usual this year, due to the late Easter and lack of strong apparel trends. With this in mind, we asked Blacks’ Senior Consultant Steve Pruitt how merchants should plan for the rest of the season.
Here’s what he had to say about making the most of the short spring, and how to deal with markdowns this season:
What level of markdowns should retailers be willing to take—15%? 20%?
Retailers should take whatever markdown is adequate to get the job done. They need to determine what they are competing against—whether it’s the big department stores, online retailers, or other independent brick-and-mortar merchants. There’s no general markdown to shoot for, it’s on a case-by-case basis.
When should they begin taking markdowns?
Start taking them now. Because we’re at the end of the season, department stores have already started taking markdowns, and they’ll be fully engaged by the end of May. Merchants risk having to take deeper markdowns later if they do not take them now, and lose business. The rest of the market is already marked down.
When should they be landing early fall product?
Anytime now. If they don’t land early fall product now they won’t have any margin in their sales because they will have nothing new to sell. You’re ability to generate margin is based on the amount of margin you have built into your inventory, that’s why you have to have new merchandise.
What else can retailers do during the slow months of June and July to generate business?
Sell more. To do this you need to get promotional. The trick is should take the adequate amount of markdowns to move product.
Do you recommend targeted, limited-time sales, or flat, across the board markdowns?
Both. Limited time sales should have already happened since they are typically done earlier in the season. They work better as a promotional activity. But by now merchants should be taking across the board markdowns that will clear out the remainder of their inventory.
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