Retailers, consumers and prices
Premium jeans are a chic — and profitable — addition to department stores when consumers flush with cash are willing to shell out over $200 per pair. But when the economy goes south, stores and shoppers start to balk.
On Tuesday, VF Corp, maker of 7 For All Mankind jeans, said that brand’s total business was down about 10 percent in the quarter, thanks to the weak U.S. wholesale environment.
“It is absolutely a piece of the market that has been most challenged in this economy and that is the more premium luxury sector,” Chief Executive Eric Wiseman told analysts in a call following the release of first-quarter results, which were lower than the year-ago quarter.
7 For All Mankind competes with a small group of premium brands including True Religion, which announces quarterly results in early May.
The brand is sold in specialty shops, some of which are shuttering their doors in the recession, and upper-tier department stores, including Nordstrom, Bloomingdale’s and Saks Fifth Avenue.
“You see their comps so you see how they’re struggling right now to get traffic into the store,” Wiseman said.
VF’s international jeans business, too, is struggling for a good fit with the global economy.
The company, which makes Wrangler and Lee jeans sold around the world, said it was lowering its full-year earnings guidance in large part due to “a severe contraction” in the economies of Scandinavia and Eastern European countries, where jeans are apparently not at the top of the shopping list.
The Republican National Committee has spent more than $150,000 since late August to outfit Palin and her family in the fanciest of duds from department stores like Saks and Neiman Marcus, says politico.com.
Check Out Macy’s opening up shop in Dubai.
Two Bloomingdale’s department stores are scheduled to open in the United Arab Emirates’ largest city in February 2010. Macy’s, which owns the Bloomingdale’s chain, says the store’s merchandise and upscale ambiance will be similar to Bloomingdale’s in the U.S., while being ”sensitive to local preferences and customs” of the oil-rich states.
In another sign the Middle East remains a robust market for foreign retail brands, Kuwaiti retailer Villa Moda is partnering with the Dubai International Financial Center, which is owned by the Dubai government. The DIFC is buying a majority stake in Villa Moda, which operates seven multibrand shops in the Gulf region and offers high-luxury brands such as Gucci, Prada and Dolce & Gabbana.