Retailers, consumers and prices
Check out how teen retailers have miscalculated demand this holiday season and are resorting to steep discounts to get savvy young shoppers into their stores.
A visit this week to a Bay Area mall by Reuters reporter Alexandria Sage found that teen retailers such as American Eagle as well as Abercrombie & Fitch and its Hollister chain, have been reduced to slashing prices and offering “buy one, get one for half off” promos to salvage a holiday season that was supposed to be merrier than last year.
Like other retailers, the teen stores reined in inventory in the hopes of avoiding the deep discounts they’ve ended up have to offer anyway.
Their biggest goof? Bland, homogenous items, leaving pricing as the only differentiator.
Check out what’s hot in fall fashion.
Lazard Capital Markets looked at 10 September fashion magazines and identified these trends:
Boots, with Jones Apparel getting seven call-outs in the magazines.
Skinny denim and leggings, both getting play with looser, less form-fitting tops.
Motorcycle jackets, military jackets, trench coats, sheath dresses and one-shoulder tops.
Also, “studs appear everywhere in clothing and accessories, including handbags, belts, shoes, dresses.”
Companies best capitalizing on the various trends include Jones, Gap, American Eagle and Guess, among others, Lazard said in a research note.
We were going to toss in a kicker of some fashion trend that is never coming back. But face it, they all seem to come back at some point. We expect to pull out our Members Only jackets any day now.
Also in the basket:
Tween Brands Q2 loss narrower than expected
BJ’s Wholsesale profit beats Street, raises FY view
Popcorn, a hidden source of antioxidants, study says (ABC News)
(Reuters photo from 2004, because leggings always come back)
The results coming in show that things might not be so bleak after all. Sure, some retailers still disappointed with March same-store sales down more than expected. Take a look at American Eagle, whose same-store sales fell 16 percent, while analysts expected a 10.4 percent drop. Still, the company raised the low end of its profit forecast since it marked down less merchandise.
Over on the discount side, Wal-Mart’s same-store sales were only up 1.4 percent, while the Street expected them to rise 3.2 percent. Still, they were up. And they should be up again in April. The CEO of smaller discounter Target, meanwhile, had this to say:
Apparently the tough U.S. retail environment is not age-specific.
American Eagle Outfitters, which sells teen apparel said fourth-quarter profit fell more than 6 percent amid weak sales, higher markdowns and competition from rivals.
The retailer also forecast first-quarter earnings well below analysts’ expectations as it has had to take higher markdown.