NEW YORK — Whoever sees June and July as markdown, slash-and-cut clearance months, may want to do some rethinking.
Of the retailers reporting second-quarter results last week, the majority experienced higher, year-over-year gross margin rates as inventories remained lean and promotional markdowns were few.
Of the 17 apparel retailers reporting results, 11 posted gross margin rate gains while 6 reported declines. Of the gainers, eight were above 100 basis points while three, Aeropostale Inc., Stein Mart Inc. and Gap Inc., delivered gross margin gains above 250 basis points.
The second quarter for most of these companies closed at the end of July, which, along with June, have been traditional clearance months at retail.
But this year, retailers have pulled the trigger on markdowns later in the quarter, and in some cases, into the current quarter. Moreover, because of better managed inventories, there’s been fewer goods to mark down.
For example, improved inventory management, along with a focused effort to reduce markdowns, paid off for Gap Inc. On Thursday, the retailer posted second-quarter sales that inched up 1 percent to $3.72 billion from $3.69 billion.
But due to a disciplined approach to selling goods at fuller prices, the impact on Gap Inc.’s margins was immense. The gross margin rate jumped 250 basis points to 38.46.
“Gross margin expansion should continue as the company concentrates on more full-price selling and fewer markdowns to lift merchandise margins,” wrote Margaret Mager, equity analyst at Goldman Sachs, in her research note following Gap’s results. “We see the most improvement potential on the gross margin line.”
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast