The Big Picture
The U.S. economy picked up in the second quarter, growing by 2.8%, after a 1.4% increase in the first quarter. Meanwhile, inflation is cooling, and unemployment is ticking up.
It’s consumers who are driving the growth, analysts say. Overall retail sales stayed steady last month after a 0.3% increase in May.
Notably, sales at clothing and accessories stores rose 0.6%, mirroring the growth in department stores.
June Sales
Among our client stores, menswear rebounded last month, up 4%, led by Clothing, with Sport Coats racking up an impressive 18% gain. Jackets of all types continue to drive the menswear business. Suit sales were about even, up 1%.
In women’s, we saw a 2% dip as normally strong categories, such as Dresses and Activewear under-performed against last year.
Cocktail and special occasion dresses are down significantly, indicating a lack of formal events last month.
That said, business overall is good. Ready-to-wear is up 7% so far this year, and Special Orders are also coming in strong. Light sweaters, and denim are selling well.
Uncertainty Ahead?
We have been warning that as we move closer to the presidential election we may face uncertainty, which could impact consumer spending. But so far, even with the volatility of the last couple of weeks —an assassination attempt and a new Democrat nominee— sales are holding steady, and consumers remain resilient.
When we look at the numbers, markdown and inventory levels are healthy. In our client stores, markdown levels remain in the mid-teens, and inventory is not significantly overbought.
So, we are shrugging off the question marks for now. Just make sure that you clear your remaining summer goods as fast as possible to prepare for a solid start to fall sales.
Blacks’ Bottom Line
Keep your focus on preparing for a strong fall season. The momentum is there, so ride the wave.
