Improving consumer confidence will trump the effects of lingering employment woes and the uncertain risks of the “fiscal cliff” and propel retailers to a 4.1 percent increase in holiday sales.
That’s the initial forecast for the season from the National Retail Federation, to be released today by the Washington, D.C.-based trade association. The projection is higher than NRF’s final forecast for a 3.8 percent gain in 2011 holiday sales, a figure which proved overly conservative when sales for the season grew 5.6 percent to $563.02 billion. NRF last year initially projected a 2.8 percent sales increase but in December elevated the number a full point based on the strength of Black Friday weekend and other results early in the season. Sales for holiday 2010 hit $533.39 billion, 5.5 percent over the prior-year period.
“This is the highest pre-holiday number we’ve issued since the recession,” Matthew Shay, president and chief executive officer of NRF, told WWD, “but it’s not as big as last year’s actual number. And we can safely say that if the [Obama] administration and Congress were showing the kind of leadership they should be in addressing the fiscal concerns that are causing consumers to hold back, the number could be quite a bit higher. The biggest distraction is the election, but the biggest risk is the threat of the ‘fiscal cliff’ if it’s not addressed in an adult manner.”
Jack Kleinhenz, chief economist at NRF, said, “There’s still some general anxiety amongst consumers when it comes to how the state of the economy is impacting their spending plans, but retailers can expect to see excitement around their promotions and plenty of bargain hunters both online and in stores in the coming months.”
NRF also projected, through its Shop.org digital division, that online sales would grow 12 percent over the holiday 2011 level this year, reaching between $92 billion and $96 billion. That estimate, the first ever made by NRF about online sales, is incorporated into the overall NRF forecast. It compares with 15 percent growth in online sales in 2011, according to Commerce Department data.
According to NRF, retailers are expected to hire between 585,000 and 625,000 seasonal workers this holiday season, which is comparable to the 607,000 seasonal employees they hired last year. On Monday, Macy’s Inc. said its holiday hiring would rise about 2.5 percent this year to about 80,000 from about 78,000 last year. Previously, Wal-Mart Stores Inc., Target Corp. and Kohl’s Corp. had said they would take on more seasonal workers than they did a year ago.
In the equity markets Monday, signs of strengthening in the U.S. manufacturing sector — including those among apparel and textile producers — helped lift stocks on both sides of the Atlantic.
The Dow Jones Industrial Average rose 0.6 percent, or 77.98 points, to 13,515.11 while the S&P 500 Retailing Industry Group advanced 0.2 percent, or 1.21 points, to 656.67. Major gains were registered by Coldwater Creek Inc., up 17.5 percent to 98 cents following an upgrade to “overweight” from “neutral” by Piper Jaffray, and The Bon-Ton Stores Inc., up 8.8 percent to $10.34 but well below the 52-week high of $14.99 reached on Sept. 12.
U.S. manufacturing activity expanded for the first time in four months in September, according to the Institute of Supply Management. The group’s Purchasing Managers’ Index, or PMI, rose to 51.5 for last month, up from 49.6 in August. A reading over 50 percent indicates growth in manufacturing. Of 11 production sectors seeing growth, textile mills were the strongest and makers of apparel, leather and allied products rated fifth.
Backlogs, however, were down in September and employment in the sector fell, ISM said. And apparel producers said their customers’ inventories were too high.
European stocks rose more vigorously than their U.S. counterparts, with the FTSE MIB in Milan as the strongest market, gaining 2.8 percent to 15,523.10, followed by the CAC 40 in Paris, which climbed 2.4 percent to 3,434.98. The DAX in Frankfurt expanded 1.5 percent to 7,326.73 and the FTSE 100 in London gained 1.4 percent to 5,820.45.
EXCLUSIVE: @tomford is opening its first-ever beauty store. The boutique, which opens November 20 in London’s Covent Gardens, was designed with the over-the-top glam Ford is known for. Read the full story on WWD.com, link in bio. #wwdbeauty #wwdnews (📷: Simon Wagner) #TomFordBeauty
New York-based DJ @harleyvnewton threw a party to celebrate the holiday collection of her dress and pajama line @hvn at the Ladurée Beverly Hills. It Girls @katebosworth, @rashidajones and more joined in on the fun, which included cocktails, croque monsieur sandwiches and a photo booth. #wwdfashion (📷: Owen Kolasinski/BFA.com)
For the holidays, @Burberry partnered with 20-year-old artist @blondeymccoy on a series of three outdoor murals in downtown Manhattan. The murals are McCoy’s interpretation of a Christmas eve party, the idea of charity and the spirit of family. His third mural, pictured here, is the most personal. The image depicts McCoy’s grandparents and father in London’s Trafalgar Square in the Seventies. “My work often features lots of sentimental objects.” #wwdeye
For spring 2018, designers applied bold colors and cartoonish motifs on everything from sneakers and belts to key chains. See all the top men’s accessories trends on WWD.com. #wwdtrends (📷: George Chinsee; Prop Styling by @rnasti; Market Editor: @luiscampuzano)
The @dior-sponsored @guggenheim international gala pre-party has a history of drawing cool-girl musical acts to serenade the crowd –– and last night was no exception. @haimtheband performed songs both new and old, and lured a star-studded audience with the likes of Rebecca Hall, Kate Mara, Mamoudou Athie and more. #wwdeye (📷: @lexieblacklock)
In a partnership between the @metopera and the @englishnationalopera, “Marnie” was born. The opera, with costumes sponsored by @mrporterlive, is an adaptation of the 1961 thriller by Winston Graham. Arianne Phillips, who created the costumes, is no rookie: She’s styled Madonna for her tours and created costumes for a myriad of films in the past. Read WWD’s interview with Phillips, where she talks about her inspiration for the opera’s costumes on WWD.com #wwdfashion
@barneysnyc took a different approach to their holiday windows this year. Instead of Christmas decor, Barneys tapped @thehaasbrothers to tell a story of positivity, gratitude and inclusivity via heartwarming silliness and humor. “It’s about kids and it’s about coming together and being family and loving each other,” said Simon Haas. #wwdfashion (📷: @joshuascottphoto)
Beauty influencer @kandeejohnson makes her foray into hair care with a collaboration with @ogx_beauty — making it the first time that OGX has teamed up for a product creation. The collab includes shampoos and conditioners in three scents. At 39 and a mom, Johnson is a different profile than the emerging social media stars, but is considered one of the pioneers of the digital beauty influencer world. Read WWD’s interview with her on wwd.com, including the strangest beauty product she’s ever tried #wwdbeauty