The Big Picture
Retail sales continued to edge higher in June, although the pace slowed a bit. Total U.S. retail sales rose 0.2%, following a revised 1.0% increase in May.
Much of the slowdown was due to lower gas prices, which pulled down sales at service stations. Strip out gasoline, and the picture looks much healthier. Core retail sales were up 0.7%, a sign that consumers are still spending, despite higher prices in many areas.
Consumer confidence also improved slightly in June as concerns over geopolitical issues eased. That said, renewed tensions in the Middle East and the possibility of additional tariffs could put upward pressure on prices again, so it’s something we’ll be watching closely.
June Sales
Our client stores had another terrific month in June, finishing 12% ahead of last year.
Menswear remained strong with a 12% increase, but women’s apparel led the way, climbing 13% after a slight decline a year ago. We haven’t seen this kind of consistent momentum in women’s for quite some time.
Women’s ready-to-wear drove the growth, jumping 18%, while Dresses were flat, showing that ladies were looking for a broader refresh of their summer wardrobes.
In men’s, both Clothing and Sportswear posted solid gains (11% and 9%, respectively) and continued the momentum we’ve seen throughout the spring.
The real test comes this fall. Last year’s early deliveries produced some very strong sales, so comparisons get much tougher from here. We expect early fall receipts to perform well again, but sales could level off as the season progresses.
Fall Discipline
This is a good time to step back and evaluate your business by class and by vendor. Some of the brands taking up the least space in your open-to-buy may actually be delivering the best sell-through, margins, and profit.
We’ve done this exercise with a number of clients, and it’s surprising how often a few small buying adjustments can lead to meaningful gains in both sales and profitability.
Blacks’ Bottom Line
Demand is still healthy, but to finish the year strong you need to manage your cash flow well enough to capitalize on it. This means regular reviews of what’s working, and where you might be leaking cash.
