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.
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