Shop Talk

Retailers, consumers and prices

Check Out Line: Return of the killer inventories

August 25, 2010

Check out the rising retail inventories. USA-ECONOMY/

How soon retailers forget the lessons of the recession, when heavy inventory and a drop in consumer spending forced them to slash prices in order to move excess goods off the shelves in 2008 and early 2009.

Cut to the summer of 2010 and retailers are slashing prices in order to move excess goods as consumers cut back.

American Eagle Outfitters on Wednesday posted lower quarterly profit as it had to mark down more goods this summer and also said sales for the back-to-school quarter would be weak.

That follows on rival Abercrombie & Fitch also having to discount to clear inventory.

But it isn’t just the teen apparel sector. Last week, J.C. Penney said its inventories were up at the end of the second quarter, prompting concerns from analysts┬áthat that┬áretailer would also need to increase discounts to sell merchandise.

Well, summer is sequel season, and it seems like we have seen this movie before.

Also in the basket:

Barnes & Noble says Burkle aims for control

Costco targets mall space to expand its reach (WSJ)

(Reuters photo)

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