The Big Picture
As February wanes, we continue to see a confusing mix of economic numbers that underscore the uncertainty of the market. Jobless claims continue to notch up, but consumer confidence is finally starting to rebound after a year of pessimism.
Some retailers got a boost earlier this year, purportedly due to the recent $600 stimulus checks, but that bump has passed, and our higher-end apparel merchants didn’t reap the rewards.
On the positive side, coronavirus cases are dropping steadily, and more areas are opening up for business. For these reasons, a recent survey of economic forecasters predicted an annual growth rate of 3.2% for the first quarter of this year, and an even higher 3.5% rate for the second quarter.
Winter Weather Chills Sales
While we were just regaining some momentum, the winter storms that covered most of the country last week put a freeze on business. Stores in Texas were particularly affected, and some inventory and e-commerce deliveries were delayed. This left our February numbers only slightly better than January.
Once again, clothing categories saw the least activity, down more than 40% from “normal” pre-pandemic times. Sportswear did significantly better, however, as did accessories for both men and women.
As we look ahead to warmer weather and spring holidays, don’t push off any deliveries. We expect business to pick up in the second half of March, and you don’t want a lack of new inventory to catch you flat footed.
For the full spring season of March through June we are forecasting sales to be down by low double digits compared to SP’19. That said, fall of this year should be closer to FA’19.
To maximize the coming pickup in demand, your inventory needs to be rebalanced. As we’ve said before, the balance of sales between departments is shifting to more casual and active categories. This means that FA’21 may look very different to seasons past.
Blacks’ Bottom Line
Have you shifted into the new fashion demand cycle for fall?