Americans want their weekend and casualwear to be as low cost as it is low key.
This story first appeared in the June 28, 2007 issue of WWD. Subscribe Today.
The casualization of America is still going strong, based on the 83 percent of those surveyed who bought casual clothes in the last year. This makes casualwear the apparel category that the highest percentage of people said they bought, far ahead of second-ranked denim at 71 percent. (Accessories claimed a 73 percent share.) Furthermore, while some other categories, including intimate apparel and activewear, slipped in the percentage of people buying, casualwear held steady.
Among Baby Boomers ages 50 and older, 86 percent bought in the category — a higher percentage than teens at 79 percent.
Shoppers aren’t splurging on their weekend wear. They report buying their casual duds primarily from moderate and better department stores and discounters. Department stores actually gained ground and passed discounters as the first-choice destination for casualwear.
A third of those surveyed said they most often frequented department stores, up five points from 28 percent last year. Kohl’s again led the way, holding at 27 percent. J.C. Penney lost a point, falling to 24 percent, followed by Macy’s at 14 percent, up three points. Macy’s may have gained in percentage points in this and other categories, due in part to its conversion of numerous May department stores across the country to the Macy’s nameplate in the past year.
Discounters trailed department stores closely at 30 percent, no change from last year. Although Wal-Mart fell nine points to 28 percent, it still led the pack not only as the most popular discounter, but also as the most popular retailer for the category. Target also lost ground, dropping eight points to 21 percent, as did Kmart by a more modest two points to 8 percent. Off-pricer TJ Maxx took 10 percent.
Specialty stores attracted a more modest 17 percent of customers, down from 26 percent last year. Gap and Old Navy held the top two specialty store spots, though both lost percentage points. Old Navy scored 14 percent of those surveyed, down from 21 percent last year, while Gap drew 8 percent, half of the 16 percent in 2006.
When asked to choose just one store they shopped at most often, those surveyed scored these four individual retailers the highest:
— Wal-Mart, at 15 percent, down from 19 percent.
— Kohl’s, at 14 percent, up from 11 percent.
— J.C. Penney, holding at 8 percent.
— Target, at 8 percent, down from 9 percent.
Wal-Mart’s slide reflects its challenges this year — performance that Wal-Mart Stores Inc. vice chairman John Menzer categorized as “very weak.” The retailer is scaling back domestic store growth to concentrate on merchandising and improving comps. Wal-Mart is still committed to low-price leadership and rollbacks, noting that, when it strayed from those focuses to compete with stores like Target with trendy apparel and pricier home decor, sales flagged.
As Wal-Mart scales back, Kohl’s is growing. The moderate-priced department store, which enjoyed more than 30 percent earnings growth last year and opened 85 units in 2006, plans to unveil 110 to 115 stores this year and intends to operate more than 1,200 stores by 2010. Kohl’s key is its development of exclusive merchandise, including Chaps, Candie’s, Elle, the Daisy Fuentes collection and Simply Vera Vera Wang, which is launching in the fall. Exclusive brands now make up 7 percent of Kohl’s sales, but the retailer labels them as increasingly important initiatives.
Exclusive collaborations and more stores also make a winning formula at J.C. Penney, which, too, is enjoying double-digit growth. The moderate department store attributed gains to its exclusive fashion merchandise, including this year’s launches of lingerie brand Ambrielle and the exclusive Liz & Co. and Concepts by Claiborne lines. Penney’s also has high hopes for American Living, by Polo Ralph Lauren’s Global Brand Concepts. This is expected to be the biggest launch in Penney’s history when it hits stores in January. The chain opened 28 stores last year and plans to open at least 250 units in the next five years, including Penney’s first Manhattan outpost next year.
Target’s strong comparable-sales growth relative to rival Wal-Mart rests in its ability to convince consumers to purchase higher-margin goods. “Wal-Mart is the discount strategy; Target is the differentiated strategy,” according to Jim Hogan, Target Corp.’s group vice president for New England stores. To sustain its competitive advantage, Target plans to continue to separate itself by increasing its private label brands, like the seasonal collaborations with Patrick Robinson’s Greek-inspired fashion, Libertine by the British duo Cindy Greene and Johnson Hartig and an exclusive handbag collection by designer Devi Kroell, which is launching this year.