The Big Picture
A looming economic crisis in the euro zone, and high unemployment and political infighting at home are making it hard to rally economic optimism. The International Monetary Fund (IMF) has already chimed in, lowering the U.S. growth forecast for this year to 1.5%, down 1% from previous forecasts.
Although there is a lot of economic uncertainty, our real retail data is not so grim. Holiday sales are still expected to be positive, although down from the last two years, and some big box retailers are even increasing their hiring for the season.
After the debt ceiling debate caused a stock market shakeup, and hurricane Irene paralyzed the East Coast, it’s perhaps no surprise that August retail sales were down.
Overall sales dropped 2%, according to Blacks’ Trends. Menswear also posted a 2%, drop, due to declines in accessories, sport shirts, jackets, and knits.
In womenswear, dresses and special order performed well, while accessories fell by 15%. Still, women’s wear sales only dropped a total of 1%.
(To see more detailed trend numbers and forecasts, go to our Trends by Class page.)
Now with August neatly filed away, we have both feet into fall and sales so far have been decent. Trunk shows are doing particularly well, and we expect the month to come out positive overall.
There is no doubt that there is uncertainty around holiday sales, given the current economic climate. Our best advice is to be prepared for the worst, while still being positive.
Look closely at your plans, believing that they are doable. But, be prepared to make changes to your on-order and sales plans, in case the climate changes.
For fall and spring, it’s critical that you are not overbought. If sales do start to slow, it will be very hard to cancel on-orders for holiday, so make sure that you have promotional plans in place, in case you need to clear those goods after Christmas.
Finally, try not to get caught up in the emotional ups and downs we are seeing on the news. Concentrate on your real-world numbers, and reaching your goals.
Blacks Bottom Line:
Don’t ride the emotional roller coaster of stock market highs and lows. Keep focused on your goals and make contingency plans just to be safe.
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