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.

Lynne Koplin, president of women’s at Oxford Industries Tommy Bahama brand, estimates that the visits by retail accounts to her booth are off 25 percent. 

“The salesmen have to be on the road,” Koplin said, noting that it takes more effort to book a sale in a new environment in which consumers have cut back spending and major retailers have suffered double-digit monthly sales declines.

A visitor to the MAGIC show is greeted by a dizzying display of garments, footwear and accessories for sale - from bejeweled jeans to tailored men’s suits to flowing tie-dyed dresses. A brand can easily get overlooked among all the competition, so some are spending more to attract notice, and banking on pent-up demand they say will hopefully drive growth next year.

Cho said she spent on a bigger booth this time and flew in more employees from the company’s Los Angeles headquarters.  She’s encouraged by the fact that her jeans lines are “doing better than ever.”

At men’s outerwear company Weatherproof Garment Co, overall advertising spending is up by a third, and President Fredric Stollmack says the company is “taking advantage of a weak media market.”

“We’re having a good show. We’re selling to big stores and they’re all here with their top  management,” he said.

Still, no one really knows just how the fall and winter season will play out, despite what many say is a positive start to the big trade show that sells for spring.

Stollmack summed up the question on everyone’s mind: “How are the stores going to do? No one knows.”

(Photo: Reuters)

Check 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.

Department stores and apparel chains are expected to post the worst drops at 9.4 percent and 5.1 percent, respectively, as consumers turn  thrifty and focus on essentials in the recession.

Meanwhile, in another bad sign for a recovery, delinquencies on credit card debt rose to an all-time high in the first quarter as a record number of cash-strapped consumers fell behind on their bills, according to the American Bankers Association.

Also in the basket:

Obama administration takes action on food safety

Walmex quarter seen strong despite recession

Canada’s Jean Coutu narrowly tops estimates

Retailers Do More With Less Inventory (WWD, subscription required)

Tight Squeeze: Making Room For a New Men’s Fashion (Wall Street Journal)

In a Downturn, Jewelers Aren’t So Precious (New York Times)

(Reuters photo)

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.”

So……how about a Gunn-Mizrahi line?

(Photo: Reuters)

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?

Well, at Banana Republic there will be no full-priced purchasing for select credit card holders until May 1.

The apparel retailer sent a mailer this week to holders of its “Luxe” credit card. In it, the retailer offers an additional 10 percent off any full-priced or sale item when it is charged on a Luxe credit card between Feb. 1 and April 30.

“Just a small gesture to show you how much we appreciate having you as a customer — and a reminder that we’re here for you through thick and thin,” writes Jack Calhoun, president of Banana Republic.

Looks like full price won’t be in full effect until later this spring at Banana Republic.

(Photo: Reuters)

Got 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.

“The proper attire can truly make a difference in an individual’s life,” said Jerri Rosen, founder of Working Wardrobes in Fountain Valley, California, in a statement released by Men’s Wearhouse. “With these donations, men will have the opportunity to walk into an interview with confidence - an essential step toward economic stability.”

Other companies that have participated in clothing drives include Dress Barn, Robert Half International and Hilton Hotels. Perhaps other retailers will follow suit?

(Photo/Reuters)

American 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.

“We’ve identified those (styles). We’ve taken appropriate action, both from a mark down point of view and also from a repositioning of holiday for ‘08,” O’Donnell continued.

While O’Donnell declined to identify the worst selling styles, the retailer says it’s changing things up for the holiday season and next spring, bringing in at least four new styles for women and a few new lines for men “that we think are going to be very brand appropriate,” O’Donnell said.

 American Eagle posted sharply lower profits on Tuesday, hurt by weaker sales and increased markdowns needed to move unsold merchandise, and forecast third-quarter results below analysts’ estimates. 

(Photo/American Eagle)

Check 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. 

Also in food news –  Burger King reported quarterly numbers that easily beat analysts’ expectations, as consumers headed to its restaurants for a burger or two. It also issued a fiscal 2009 outlook within Wall Street’s expectations.

On the apparel end, Children’s Place posted a small quarterly profit, helped by summer clothing sales and cost cuts. Still, the kids’ apparel retailer said it expects further pressure on consumer spending due to the weak U.S. economy.

To round up news in the sector, Kohl’s Corp, a mid-tier department store operator, named its president Kevin Mansell as its chief executive, replacing Larry Montgomery, who will remain the company’s chairman.

Also in the basket:

Skechers says still wants to buy Heelys

Shareholder aims to thwart Longs-CVS deal - NY Post   

Tesco completes 605 mln stg of property deals

(Photo: Reuters)

Check 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)

The U.S. government is currently putting $100 billion into consumers’ hands in the form of tax rebates, hoping the fresh cash will stave off a recession.

It’s a plan similar to the once the government followed in 2001, except at that point, the economy was already in a recession.

Back then, the National Bureau of Economic Research said the U.S.  economy entered a recession in March 2001. To get the economy out of its funk, the government passed a stimulus package and mailed out rebate checks over a ten-week period from late July to the end of September 2001, according to research conducted by Thomson Reuters.

When looking at the monthly year-over-year changes, U.S. retail sales started slumping in the beginning of 2001 and reached their lowest level in September 2001, according to the research report. The Thomson Reuters Same Store Sales Index registered a rise of just 0.8 percent in September 2001, but then began to bounce back once the rebate checks were mailed out, with October notching a 1.6 percent gain.

“When comparing the sectors within our retail universe, we find that the discount sector performed the best during the 2001 recession and remained within the 3 percent - 6 percent growth range,” the Thomson Reuters report states. “It registered its strongest same store sales result ever of 9.5 percent in February 2002.”

The report said similar trends are being repeated now as middle class consumers cut back on spending and head to discount stores.

“In 2001, Wal-Mart beat Target’s same store sales results 11 out of 12 months. Today, we’re witnessing a similar trend as Wal-Mart has smashed Target’s comps over the last six months,” the report stated.

During the 2001 economic slowdown, the apparel sector performed the worst and posted its weakest comp ever of -9.5 percent in September 2001, the research shows. It also said the teen apparel group and department stores underperformed and posted sluggish comps during the period leading up to September 2001, but were able to bounce back shortly after.

“If past behavior is a good indicator of future behavior, we are likely to continue to see an increase in consumer spending in the short-term while the 2008 rebate checks are distributed,” the report states. “This in return could help improve the overall economy since consumer spending accounts for about 2/3 of GDP. The discount group is expected to post a 3.1 percent comp, but analysts continue to look for an even stronger 3.5 percent result excluding Wal-Mart.”

(Photo: Reuters)