January Retail Report – Spring Plans & Fall Trends

The Big Picture
The U.S. economy grew 3.2% in the last quarter of 2010, spurred by strong consumer spending, the Commerce Department reported. The growth should come as no surprise to retailers, many of which posted the brightest holiday season in years.

Consumer spending was up 4.4% in the last quarter, but analysts warn that we can’t expect that kind of growth to continue, given the high unemployment rate.

Meanwhile, January, which is traditionally a very slow month, looks like it will turn out to be a bit stronger than expected, at least for retailers who haven’t been affected by the recent series of storms that have hit the East Coast.

December Trends
Women’s wear was the clear winner in December, surging 11% over last year, with strength coming from dresses and special order, which grew 35% and 33%, respectively. Even though dresses were a little soft earlier in the fourth-quarter, they got a clear boost from dressy holiday festivities.

Accessories didn’t perform as well as we hoped, growing only 6%. Part of the reason was that retailers didn’t stock enough fancy scarves, which were top sellers for the season.

Men’s grew just 2% in the month, with jeans, jackets and special order leading the way. Clothing is still in a down cycle, as suits, dress shirts and neckwear all took a dive. Of course, this was due to the cyclical nature of clothing sales and we expect the category to strengthen once early trunk shows begin.

(For more in-depth trends and forecasts, see our Trends-By-Class page.)

A Look Ahead
As we head further into this season, it’s time to start naililng down the details of your March trunk shows, and making sure that all the fall/winter items are cleared from your floor.

Valentine’s Day is the next holiday on the horizon and there’s no reason why you shouldn’t grab the opportunity to design a fun promotion and spark interest in your spring inventory.

As you look ahead to fall, keep in mind that we could see slower growth than we did last season, given that we’ve had two consecutive years of fall increases.In a normal retail cycle, we would not experience three consecutive years of growth.

The good news is we are hearing great feedback about FA’11merchandise. For men, outdoorsy looks, soft jackets, boots and slender models are all trending. (For more on fall trends, see our Fall 2011 Menswear – Real vs. Runway Trends report.) In women’s, sheer looks, knits, tailored outerwear, skinny pants, and flat, heavy boots will be hot.

Blacks Bottom Line
Concentrate on your planning and make sure to flow new goods every two weeks if you want to post gains over the next few months. Otherwise, we don’t expect increases until spring.