Retailers, consumers and prices
from Raw Japan:
James Dean smouldered in his, the Marlboro men looked rugged in theirs, and now me and hordes of other Japanese people can feel frugal in ours. Jeans -- practical, durable and with just a hint of rebelliousness -- are at the centre of a price war in Japan, as struggling retailers look to lure cash-strapped customers back through their doors.
With the country slipping deeper into deflation and its jobless rate rising, shops have for some time been marking down almost everything from bags of cereal, to laundry detergent and bicycles.
But curiously it is jeans that have emerged as a symbol of this deflationary race as major retailers roll out dirt-cheap denim in bids to undercut each other.
Fast Retailing, which operates the Uniqlo casual fashion chain, started the phenomenon in March when it said it it would start flogging jeans for 990 yen (about $11) a pair at its g.u. stores.
That staple in women’s fashion just turned 75!
Levi Strauss & Co created the first 701 denims for women in 1934 (the iconic 501 for men came long before) as ranchwear. But the company’s women’s jeans are now as much a favorite with the hip and chic as with the more casual wearer.
The company is celebrating the 75th anniversary of its women’s jeans by arranging store events in New York, Los Angeles, San Francisco, and Chicago — showing off women’s jeans and memorabilia from bygone eras as well as offering special discounts.
Check out what’s happening in apparel retail, according to UBS analyst Roxanne Meyer.
There were lower promotional levels last week as fall items hit stores, Meyer said in a research note.
Retailers are focusing on plaid woven tops, scarves, skinny and boyfriend denim, leggings, artsy graphic tees, flutter sleeves, boyfriend blazers, ruffles and chunky necklaces. Oh, and skirts are making a comeback.
Meyer said she is starting to see some “more reasonable” price points at Abercrombie & Fitch, which has tried to avoid aggressive promotions that other retailers have used for months to clear excess inventory during the recession.
But she also said demand for $180 blazers, $80 super skinny jeans, $98 boyfriend jeans and $80 beaded silk tank tops at the store will be limited.
Also in the basket:
CIT Group on cusp of $3 billion rescue
Hasbro profit beats, Discovery deal to hurt less
Jarden sees profit, sales meeting or topping view
RVC buys Ellen Tracy collections (WWD, subscription required)
Barnes & Noble consolidates publishing (Wall Street Journal)
We know, dear fashionable readers, that, much as you like to look good in your jeans, the idea of shelling out $300 for said casual apparel item just doesn’t sit too well in a recession.
Apparently others think so, too, and premium denim maker True Religion might just be starting to notice.
Wedbush Morgan’s Jeff Mintz wrote on Thursday that consumer weakness was finally catching up to True Religion, which has been riding a long streak of popularity even as other apparel makers and retailers have been down in the dumps.
“Recent channel checks suggest slower business in the company’s retail stores,” Mintz wrote, adding that the change from October and November was “significant.”
“The post-Black Friday lull has left the stores much quieter and, we believe, could be a sign of slowing demand for the brand due to the difficult consumer economy,” he wrote.
Mintz cut his price target on shares to $17 from $23. Shares are down 35 percent since January.
True Religion raised its 2008 outlook last month, posting a 65 percent rise in third-quarter sales and a 76 percent rise in net income. But Mintz wrote that the company’s outlook was still achievable, despite what he called a lagging sportswear business due to relatively higher prices and “less compelling non-denim product.”
Ok, so maybe jeans are still recession-proof, but paying $172 for a hoodie? Maybe not so much.