Although April showers and an early Easter wiped out same-store sales for most apparel retailers, there’s hope that May will bring in the green.
The early Easter holiday combined with a colder-than-average April drove sales down across all sectors, and caused many retailers to miss both their own and industry expectations.
While lower sales were anticipated, the declines were steeper than expected.
Of the retailers tracked by WWD, the department store sector reported an average same-store sales decline of 4.7 percent. Mass merchants decreased 3.6 percent, and specialty stores posted the worst performance with an average decline of 7.8 percent.
Results showed the deepest year-over-year decline on record since the early Nineties, said John Lonski, chief economist for Moody’s Investor Services. He said it was important not to predict excess gloom from the results.
“We want to be very careful about extrapolating too much bad news from this report,” Lonski said. Other economic factors such as state jobless claims, work derived income (the sum of wages, salaries and the income of the self-employed) and energy prices are also exerting conflicting forces on consumer spending.
Despite all those concerns, many retailers and industry observers stressed that overall, many retailers did not fare horribly for the spring, if March and April sales are considered in tandem.
“When you look at April sales in isolation it seems a bit like a disaster,” said Donald Soares, a principal in Capgemini’s retail practice. “But I wouldn’t read too much into the negative April sales figures.”
April was under pressure from so many quarters that it’s important not to overreact to the monthly tallies, sources stressed, although it will be important to watch how economic factors play out.
“Questions coming out of this month are: is there something bigger happening, or is it truly just weather and Easter?” said Deborah Weinswig, managing director and retail analyst with Citigroup. For most retailers, she said, it really is about those factors although some might be facing larger issues.
Energy prices could also be impacting consumers’ willingness to get out and shop, industry observers said. Gas prices in some parts of the country are approaching $4 a gallon. It is possible that consumers have reached the tipping point in relation to gas prices, said Janet Hoffman, managing director of the North American retail practice for Accenture.
“I see things on the hanger and I’m, like, ‘I never knew that color worked on me.’ It’s things you necessarily wouldn’t choose to wear, but once you put them on, you see why Janie is who Janie is." — Lily Collins on working with former "Mad Men" costume designer, Janie Bryant on creating looks for her role as Celia Brady's in Amazon series, "The Last Tycoon." 📸@jilliansollazzo #wwdeye
EXCLUSIVE: Sarah Rutson has been tapped to Build New American Fashion Group. The parent of Joie, Equipment and Current/Elliott hired the merchant to rev up its brands and expand its portfolio into designer, beauty and lifestyle categories. Read more on WWD.com, link in bio. #wwdfashion
Michael Kors' $1.3B Jimmy Choo deal has the company squaring off with Coach Inc. as both seek to build American powerhouses. Coach bought Stuart Weitzman in 2015 and Kate Spade just two weeks ago, but Michael Kors' acquisition may be putting pressure on its rival in the new push for scale. #wwdnews (📷: George Chinsee)
Meet actress Lucy Boynton, who plays opposite Naomi Watts in the recently released Netflix series "Gypsy." Boynton stopped by WWD to talk about her upcoming projects and her nomadic lifestyle. Get all the details on WWD.com. #wwdeye (📷: @dandoperalski)