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Apparel Sales Decline To $16.18B in March

Sales at apparel and accessories stores slid 1.9 percent in March to $16.18 billion versus February, the Commerce Department reported.

NEW YORK — Pressured by rising fuel costs and a tepid job market, consumers were slow to spend on fashion in March, challenging stores and vendors to attract customers with sharper styles or better prices.

Sales at apparel and accessories stores fell 1.9 percent in March to $16.18 billion compared with $16.5 billion in February, after factoring out seasonal variations, according to a Commerce Department report on Wednesday. Sales in the category were up 1.6 percent over last year.

Seasonally adjusted sales at general merchandise stores dipped 0.7 percent to $43.33 billion compared with the previous month, but increased 4.4 percent against March 2004. Department store sales of $17.82 billion were 2 percent less than February and 2.1 percent behind a year ago.

The apparel category lagged overall retail sales, which increased 0.3 percent,  lower than the forecast 0.8 percent rise. Retail sales went up 0.5 percent in February. Some economists raised the possibility of continuing declines in consumer purchases.

“Part of what we’re seeing is that consumer spending has been quite strong for a while, it’s starting to slow down and unless we start seeing strong performance in the job market…a more subdued spending trend is in store,” said James Glassman, an economist at J.P. Morgan Chase.

High gasoline prices, cooler-than-normal weather and a calendar shift in the Easter holiday all could have contributed to the weaker-than-expected March report, Glassman said.

“The stores have to be more aggressive with discounting,” he said. “They have to counter what’s going on.”

Glassman compared the start this year with the beginning of 2004, when consumers were slow to start buying, but were eventually lured back to the stores.

Fashion companies have to work harder than ever during these periods to keep up with trends and concentrate on their product, said Elan Eliau, founder and chief executive officer of Joseph A., a better sweater firm here.

“Gas prices are just out of control,” Eliau said. “There’s no question that the lack of good weather has really had a major effect on retail sales. There hasn’t been a lot of consistency [from week to week at retail]. The total economic picture has had an impact.”

This story first appeared in the April 14, 2005 issue of WWD.  Subscribe Today.

Fuel prices have risen 27.2 percent from a year ago, with a gallon of regular gasoline selling for an average of $2.26 across the U.S., according to the Automobile Association of America.

The sales report echoed what retailers said last week when they reported same-store sales for March. Teen retailers turned in a pocket of strength, with Abercrombie & Fitch and American Eagle posting 21 percent and 29.2 percent increases, respectively.