The Big Picture
After a lull in June, sales made a comeback last month, notching up 1% overall and beating analysts’ expectations. Consumer spending also increased in July as inflation eased.
With this data, the Fed announced that the time has come to adjust its policy. Analysts are expecting that a September interest rate cut is on track. The only potential hiccup is if the job market continues to weaken. A government revision of job numbers revealed that over 800,000 fewer jobs were created in the 12 months ending in March.
While most of the economic picture looks sunny, we will keep our eyes on jobs and any potential election-related jitters.
July Trends
Among our client stores, menswear was flat last month, but women’s wear showed a 2% gain, boosted by sales of Denim (up 11%), Ready-to-wear and Special Order. Dresses of all sorts are still down, 8% in total, which is tugging on women’s overall growth.
In men’s, Clothing categories keep on climbing. Sales of Suits were down by 5%, but Sport Coats jumped 9% over last year and soft coats soared by 39%. The Jacket story in Men’s continues to be what’s driving business.
Fall Forecasts
We are predicting a strong start to the fall season with a tapering down around the election. Overall, we should see low, single-digit growth.
It’s worth noting that both the stock market and consumer spending tend to slow before presidential elections and then see a recovery in the weeks following.
Whatever is happening in the news cycle, make sure that the mood in your store is upbeat and focused on fashion.
You can also keep your eyes on your on-order and 9/30 completion dates. A lot of inventory has already landed, which is great because we have plenty of runway to sell it down.
From what we’re reading, some vendors may finally be dropping prices in the face of price resistance. It will be interesting to hear what our customers have to say when they see the fall prices.
Blacks’ Bottom Line
Economic soft or hard landing, business is still good. Ask yourself what’s going to drive double-digit increases in your store again.
