The Big Picture
Although the U.S.’s overall economic picture looks solid, the 12-month inflation rate ending in March ticked up to 3.5%, which was .03% higher than the previous month. Stubborn inflation and high interest rates are taking a toll on consumer confidence and the housing market, even though unemployment remains remarkably low.
The latest GDP numbers out this week show a slowdown in economic growth to 1.6% for the first three months of the year.
But on the retail side, consumer demand has remained firm and overall sales climbed 0.7% in March from February, after a boost from Easter spending.
March Sales
Among our client base sales are brisk, up 6% last month overall. Menswear posted a 7% gain, while women’s wear ticked up 3% from a year ago.
In women’s wear, sales of Ready-to-Wear jumped by 10%, and Dresses made a rebound with a 5% gain. This comes after several seasons of slow dress sales, so we expect this business to continue to ramp up over the next 60 to 90 days.
In men’s, although Suits were down, Sport Coats saw a 12% increase, indicating that Clothing categories still have momentum. Activewear was also hot, up 7%, as men looked for fresh spring styles.
Categories within Sportswear that were soft in SS’23 (Knits and Wovens in particular), have also rebounded for many of our stores.
Minimizing Markdowns
While business is good, we know that the end of the season is around the corner so start identifying potential markdown items now.
You may want to incentivize your sales team to sell slow-moving goods, or reorganize your floor to get more attention to these items. If your vendors will allow it, you can also try to swap these goods out for more popular items, although this can be difficult.
To offset the margin hit you may take from future markdowns, look for off-price buys, particularly on goods that are transitional into fall.
We have a lot of good sales momentum now, so take advantage of it before we face a potential slowdown later in the year.
Blacks’ Bottom Line
We’re about 30 to 45 days out from taking markdowns. Start planning your strategy now. It’s also the time to make any last-minute adjustments to your FA’24 buy.
