Shop Talk

Retailers, consumers and prices

It’s trade show time and apparel eyes are on spring

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magic-0011 The MAGIC apparel trade show, the largest clothing convention in the country, is again being held in sweltering Las Vegas but the organizers, at least, are feeling cool.

“Everything is up, exhibitors are up 15 percent. It’s wonderful news for the industry,” said Chris DeMoulin, president of MAGIC International, organizer of the bi-annual event.

Yet the devastation of the last year on the once-booming industry – versus just two years ago when apparel brands didn’t hesitate to erect lavish booths throw parties and hand out freebies — is still on the minds of all.

“People are very cautious about what they’re buying,” said Stella Cho, owner of women’s contemporary brand Miss Me.

Check Out Line: Not so hot June expected for U.S. retailers

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shop1Check out the expected June sales declines at U.S. retailers.

Cooler and wetter weather made things tough for companies, especially those selling summer products in the first three weeks. Overall same-store sales for the month are expected to be down 4.8 percent, according to Thomson Reuters.

“The consumer is still up against too many hurdles to be spending too much money,” Storehouse Partners retail analyst Patricia Edwards said.

Gunn-ing for a new apparel line?

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USA/Tim Gunn lovers, alert! An apparel line under the name of fashion’s favorite is not entirely out of the question. So says chief executive of Liz Claiborne, the apparel giant that now employs Gunn as its chief creative officer.
    
Liz Claiborne Chief Executive William McComb, attending the Reuters Global Retail Summit, was asked whether a Tim Gunn-branded apparel line could ever be in the stars.

“I do, and obviously we would be the ones to do it,” responded McComb.
    
The strength of Gunn — who skyrocketed to fame through television’s popular “Project Runway” reality series  – is his impeccable eye, McComb said.
    
“Tim is not a designer. He does not design. What he would bring to the table is the common sense edit of how to build a wardrobe,” said McComb.
    
“He could do the black dress, the white top, the work pants … it would be not necessarily high faloutin’ fashion, but really smart.”
    
And so we wait in anticipation.  Read Reuters’ Liz Claiborne story here.
    
In the meantime, don’t expect a celebrity designer smack-down between Gunn and Liz Claiborne’s new creative designer, Isaac Mizrahi.
    
“They’re friends, they knew each other from Parsons,” said McComb, referring to the prestigious New York design school. “I would characterize it as very warm, very engaging, very friendly.”

Check Out Line: Apparel apathy endures

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jcp By Nicole Maestri Check out the ongoing struggle to sell clothes to recession weary Americans.
 
J.C. Penney and Abercrombie & Fitch both reported quarterly results that show consumers are still cutting back on non-essential items, with Penney also warning profit for the year would be worse than analysts expected.
 
Consumers have been hammered by the recession, mounting job losses and credit worries, and it appears they are sticking to shopping lists for groceries and other essentials, rejecting unnecessary purchases and seeking deep discounts.
 
While the conviction to buy only what they need has hit sales for department stores like Penney, consumers’ desire for bargains has battered Abercrombie, which has stubbornly kept prices higher than rivals, other than discounting clearance items.
 
“With a challenging economic environment, the consumer continues to show a reluctance to spend on premium brands; a price consciousness dictating shopping habits unlike anything I have ever seen,” said Abercrombie Chief Executive Mike Jeffries, a retail industry veteran. The teen clothing retailer posted a first-quarter loss wider than Wall Street’s expectations, and in an abrupt change, said it is conducting a strategic review of its struggling Ruehl chain. Meanwhile, Penney posted an in-line quarterly profit, but forecast second-quarter and full year results below analysts’ expectations. “We expect consumer spending and mall traffic to remain weak, which will be particularly evident against tough comparisons in the second quarter,” CEO Mike Ullman said. Also in the basket: Kohl’s, Nordstrom beat forecasts, raise 2009 views H&M April sales rebound boosts recovery hopes Target pilot pays employees to monitor health (Photo: Reuters)

At Banana, never having to pay full price — until May 1

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USA/The retail industry  is debating what the drastic discounts that were offered during the holiday season now means for “full priced” selling in 2009.

After becoming accustomed to discounts of 50, 60 or 70 percent, will consumers tolerate paying the full amount listed on a price tag? And if so, when will that happen? And does “full price” now mean selling items for 10 percent to 20 percent below what they were sold for a year ago?

Donate your used suit for a good cause

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mens-suits.jpgGot an old suit gathering dust in the back of your closet? Men’s Wearhouse wants to give it to someone who could make better use of it.

The retailer is holding a national suit drive at 580 of its U.S. locations, collecting donations of used suits, sport coats, slacks, dress shirts, ties and belts. The clothing will be distributed to more than 120 local and regional non-profit organizations in cities across the country and given to men in need who are re-entering the workforce.

Fighting the fugly jean

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jeans.jpgAmerican Eagle is fighting a fickle foe: fugly jeans.

What makes jeans sit on the shelf instead of flying off the shelves? That’s up to the whims of American Eagle’s 15- to 25-year old target customer. The retailer’s summer offerings didn’t quite meet the expectations of its core audience, and sales suffered.

“We had a number of styles that just did not perform. And that hurt us very, very much,” American Eagle’s Chief Executive Jim O’Donnell said on a call with analysts.

Check Out Line: It’s a bad idea to raise the turkey you sell

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turkey.jpgCheck out why Heinz didn’t suffer like Hormel did in the past quarter.

H.J. Heinz came in with a quarterly profit that beat Wall Street expectations, helped by price increases and new product sales, while Jennie-O turkey seller Hormel Foods saw its earnings dip.

Food companies have found it tough going as commodity costs shoot up, but Hormel was particularly hard hit. The reason? It raises the turkeys that it eventually sells — meaning spiking corn feed costs hurt its results. 

Check Out Line: Nike’s U.S. hurdle

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nike.jpgCheck out Nike just not doing it in the U.S.
 
The athletic shoe and apparel maker apparently is not immune to the sluggish U.S. economy. The company said Wednesday that U.S. orders for goods through November were flat.
 
It also said sales in the fourth quarter rose 4 percent in the U.S., compared with a 16 percent increase for the entire company. U.S. apparel sales rose only 2 percent.
 
Nike said it will focus on more premium merchandise that is better distributed and can stand out. It also stressed that U.S. profit margins are not eroding.
 
For Nike, getting through the tough U.S. economy might just be an invigorating workout.
 
“Strong companies who are able to navigate through those tough times can come out even stronger,” Nike CEO Mark Parker said in a conference call.
 
Ooh, feel the burn!
 
Also in the basket:
 
Anheuser-Busch to reject $46.3 billion InBev offer
 
The road runs out: Streetwear adapts as market implodes (WWD)

Steve & Barry’s Hits Trouble: Hyped clothing retailer hires turnaround help (WSJ)

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