A majority of vendors expect revenue growth to resume next year, even though a significant number of retailers don’t expect consumer spending to return to pre-recessionary levels until 2011 at the earliest.
Those are two of the conclusions from a new study by CIT Group Inc., which provides financing to small and medium-sized businesses.
Among the vendors queried, 29.8 percent of whom work in apparel and accessories, 17.3 percent expect significant growth in their revenues next year and 42.3 percent expect some growth.
However, expectations differed widely based on company volume. Among firms with revenues of $50 million to $1 billion, significant growth was expected by 22.6 percent, versus 11.8 percent for firms under $50 million, and some growth by 52.8 percent of the higher-volume companies, versus 31.4 percent of their smaller counterparts. More than half the vendors — 54.8 percent — will pursue aggressive pricing to support growth.
Despite upbeat expectations for their own businesses, 57.7 percent don’t believe economic growth will return until after 2010.
CIT found that 47 percent of retailers felt the financial markets would turn around in 2010. However, 45 percent said consumer spending would not return to 2007 levels until 2011 or 2012 and 17 percent said that might not even happen until after 2012. As for the upcoming holiday season, 67 percent said they will stock less inventory than last year, while 66 percent will offer greater discounts. Exactly half of the suppliers said they believed financial markets will turn around next year.
Among the retailers responding, 17.3 percent were from the specialty apparel sector, 15.5 percent were department store executives and 10.9 percent came from the discount channel.
Nearly half, or 48 percent, of retailers believe mergers and acquisitions will increase over the next 12 months, with 34 percent attributing the expected change to greater availability of credit and 32 percent citing reduced valuations.
Among the vendors, 66.3 percent said they have been impacted by a retail customer’s bankruptcy filing in the past 12 months, and 58.7 percent expect to be affected by such a filing over the next 12 months.
More than two in five — 42.3 percent — expect their ability to secure financing to remain the same over the next year. In addition, 45.2 percent expect their financing needs to grow over the next 12 months. Of those who expect to seek financing, 34.6 percent said it will be used for customer financing while 20.2 percent will use it for acquisitions. In general, 72.1 percent will use financing for working capital needs over the next 12 months, with 50 percent for growth and 28.8 percent for acquisitions.
In total, 110 respondents were executives and financial decision makers at middle-market retailers with revenues of $25 million to $1 billion, while 104 executives and financial decision makers were suppliers in the middle market having revenues of $2 million to $1 billion.
@tradesy is turning the concept of a showroom upside down with its new space in Santa Monica. Here, the company plans to hold events, art exhibits and a showcase rare fashion pieces like this Louis Vuitton boxing set. Get all the details on Tradesy’s first showroom on WWD.com. #wwdnews
Spotted last night at the @erdem x @hm launch event: Kate Bosworth, Rashida Jones, Kirsten Dunst and Selma Blair. The party, which took place in LA, also marked the opening of their pop-up shop. “I was interested in creating a collection that wasn’t in any way disposable. It was about pieces you’d create and keep forever, things that have a permanence to it,” designer Erdem Moralioglu said. #wwdeye (📷: Katie Jones)
Renee Zellweger in yellow in 2001 and again in 2017. Chosen as one of the 12 @pantone Leading Spring Colors (and dubbed “Meadowlark”), it only makes sense that the bright hue stands the test of time and is making a resurgence this season, seen already on stars like @blakelively and @gigihadid. (📷: Donato Sardello & @rexfeatures) #wwdfashion #tbt
Dior’s 70th anniversary celebration continues with a new exhibition at the Royal Ontario Museum in Toronto. “Christian Dior,” which is scheduled to run through March 18, takes a look at the founders tenure from 1947 to 1057 and feature 40 designs. Pictured here is an evening gown from the Ailée, fall 1948-49 haute couture collection. #wwdfashion (📷: Brian Boyle)
As one of the most recognizable models in the world, Christy Turlington Burns has an insider’s view of the fashion industry and the allegations of sexual harassment swirling around it. “I can say that harassment and mistreatment have always been widely known and tolerated in the industry. The industry is surrounded by predators who thrive on the constant rejection and loneliness so many of us have experiences at some point in our careers,” Turlington told WWD, along with her suggestions for how the modeling world should protect younger women and men. Read more on WWD.com. Link in bio. (📷: Tony Palmieri) #wwdnews
@asics America has tapped a new brand ambassador: famed DJ/record producer @steveaoki. This initiative is intended to set the tone for the new brand identity and philosophy and will include partnerships with influencers and in-store and off-line activations that will continue into next year. This is Asics’ most significant marketing effort in two decades, and is expected to attract younger consumers to the brand. #wwdfashion
24-year-old Jean Prounis is redefining the rules of jewelry. Formerly a studio assistant to Jemima Kirke and a design apprentice at Ghuran, she focuses on handcrafted subtleties and ancient goldsmithing techniques. “There was a really sterile feel in the environment and I wanted to have jewelry with character that shapes how you wear it everyday,” Prounis said. Each piece is hand made in New York, either by Prounis or three other jewelers in the district. #wwdfashion
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews