Shop Talk

from Raw Japan:

Retailers do the limbo

For some of Japan's retailers trying to jumpstart consumer spending, setting prices is like doing the limbo: How low can they go?

Japanese retailers reported mostly dismal first-half earnings results, with the industry stuck in a slump as shoppers remain reluctant to open their wallets even as the economy emerges from recession.

With no sales pick-up in sight, stores seem to have no choice but to continue their race to undercut rivals, with prices dropping for everything from cars to clothes to milk.

On the surface it sounds like a shopper's paradise: Who wouldn't mind paying less than 1,000 yen ($11) for a pair of jeans?

But it could also lead to a deflationary spiral in which consumers put off spending in hopes of further falls in prices.

And what's more, these price cuts are slicing into already razor-thin profits at companies, which are then forced to pass on the pain to employees in the form of lower paychecks.

"It's a death march," said Junji Ueda, CEO of FamilyMart, Japan's No. 3 convenience store chain.

from Raw Japan:

Denim deflation

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.

Back then, this was widely seen as an astoundingly cheap offer -- the price was around a quarter of  some jeans sold at Uniqlo, a chain known for its competitive pricing. The 990-yen jeans drove up sales at g.u., which had suffered from little consumer recognition until that point.

And the move sparked a round of tit-for-tat discounting, that this week continued with supermarket operator Seiyu, a Japanese unit of Wal-Mart, starting to sell jeans for 850 yen. "We would like to keep our price leadership," a Seiyu spokeswoman said.

The trend could also indicate that deflation in Japan is worse than government statistics show as this kind of price competition is not fully reflected in official figures.

These jeans have staying power

By Nivedita Bhattacharjee.

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.

“The Levi’s brand has a rich heritage of making jeans for fiercely independent and original women – from the pioneering women of the American West who first adopted men’s jeans and inspired the creation of a women’s jeans range, to today’s movie icons,” said You Nguyen, senior vice president and creative director of the Levi’s brand, in a statement.

Though jeans have been the one salvation for apparel retailers in the tough selling climate, San Francisco-based Levi Strauss swung into the red in its second quarter on global currency fluctuations and soft global sales.

Meanwhile, the competition gets a bit tougher this year as host of brands crowd the women’s jeans market from Gap  to Ann Taylor.

Pay rent, buy food, fill up tank … buy jeans?

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.

But you tell us, readers … is buying premium denim a no-no today?

(Reuters photo of jeans NOT sold by True Religion)

Wal-Mart shows its strength on Black Friday

Wal-Mart flexed its retail muscle on Black Friday to the delight of deal-seeking shoppers who spoke with our reporter Nicole Maestri in Columbia, Maryland.

Early bird buyers with shopping carts stuffed with toys, electronics and clothes stood 10 deep in checkout lines and the parking lot was packed with cars at 7:30 in the morning. In Valley Stream, Long Island, the crush turned tragic when a temp worker was killed by the crowd surging through a Wal-Mart’s doors.

The Friday after Thanksgiving, known as Black Friday, kicks off the Christmas shopping season and marks what is traditionally the busiest retail day of the year. But what began to emerge from shoppers’ stories was that even if they were willing to look for deals elsewhere, they kept coming back to Wal-Mart.

Marathon shoppers April Richards, 26, and her mom, Diana Eichhorn, 49, started their holiday gift hunt at the Thanksgiving Day sale at Kmart, which was out of the pajamas they hoped to buy. From there they went to Arundel Mills, that features outlet and discount stores, at midnight. They also stopped by Kohl’s at 4 a.m.

But at Wal-Mart they found deals on everything from a sewing machine to $8 jeans and $4 pajamas. The duo said the store’s discounts were so good that they bought jeans and other items that they normally would have purchased elsewhere.

Wal-mart is expected to be one of the few companies to prosper this holiday shopping season, which is feared to be the weakest since the early 1990s as a credit freeze and home price implosion hit consumers’ wallets.

In Oakland, California, shoppers who lined up in the darkness to be first to get their hands on deals when the store opened at 5 a.m. sprinted for the electronics and computer departments.