Retailers, consumers and prices
It’s a sunny day in the apparel business — are we having fun yet?
The slide opening VF Corp’s presentation at the ICR XChange Conference on Tuesday said it all: “These are unprecedented times … are you having fun yet?”
For investors and companies attending the two-day event in Dana Point, California, the answer was probably yes, given the 77 degree temperatures, sunny skies, view of the beach (and distance from the freezing weather in the mid-West and East of the country).
But the wider economic environment was at the forefront on everyone’s minds. On the opening day, apparel maker VF cut its fourth-quarter profit and revenue forecast, while athletic gear manufacturer Under Armour posted preliminary fourth-quarter results that were far below expectations.
Every retailer and apparel manufacturer presenting on the first day cited the difficult environment that has curbed the consumer’s appetite for apparel and footwear, with no near-term signs of abating.
But most companies tried to remind investors of the rosy side of the equation in 2009, including apparel maker G-III citing lower overseas product costs, shoe and hat retailer Genesco talking about a “turnaround in the power relationship with landlords” and upscale clothing retailer J Crew, touting its new Madewell brand.
Also overheard and witnessed at the ICRXChange:
“You’re the man!” “No, you’re the man!” — J Crew’s Mickey Drexler and American Apparel’s Dov Charney in a mutual love-fest, each proclaiming their admiration for the other’s brand.
During a panel on the purchasing tastes of teenagers, a female teen panelist offered her two cents: “I stopped shopping at Abercrombie because they’re so rude.” Much laughter from the room.
“Happy New Year — I think you all need some alcohol!” said Hot Topic’s Betsy McLaughlin, sporting black fingernails and greeting investors at her end-of-the-afternoon presentation where beers were served. The Goth-inspired apparel, accessories and music retailer recently raised its fourth-quarter profit forecast, making it a rare bird in the struggling sector.
Investors speculated on Steve Jobs’ health — three hours before Apple’s announcement Tuesday that he would take a medical leave of absence until June.
(Reporting by Alexandria Sage)