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.
Breaking News: @louisvuitton's men's artistic director @mrkimjones is leaving the French fashion house after nearly 7 years. Jones joined Louis Vuitton in 2011, following a three year tenure as creative director of British luxury goods brand Alfred Dunhill. Jones is to exit Louis Vuitton after showing his fall 2018 collection for the brand in Paris on Thursday. Read the full exclusive story on WWD.com. Link in bio. #wwdnews #wwdfashion
For men’s fall 2018, @giuseppezanotti drew on elements from streetwear, sport, biker, combat and rock ‘n’ roll. Pictured here are a pair of shoes from the collection, featuring zippers, rhinestones, and silver hardware. Head to WWD.com to see a roundup of the accessories from Milan’s men’s fall 2018 shows. #wwdfashion (📷: Andrea Delb)
To celebrate the 25th anniversary of @ralphlauren’s snowboarding collection, the brand is mining its archives. The iconic brand is reintroducing vintage styles and dropping new designs for a color capsule that will be available in Ralph Lauren stores and @openingceremony on January 25. The capsule will consist of 10 pieces, including the Snow Beach Pullover, pictured here, which is a collector’s item that rapper Raekwon wore in Wu-Tang Clan’s “Can It Be All So Simple” video. #wwdfashion (📷: Tom Gould)
For @rochasofficial’s pre-fall 2018 collection, creative director Alessandro Dell’Acqua channeled the sophisticated and intriguing Catherine Denevue in the film “Belle de Jour.” Polished collarless coats, midi skirts, suits and ’60s graphic motifs were all featured in the collection, adding a sense of discreet luxury. See the rest of the photos on WWD.com #wwdfashion
“We tried to produce clothing of that couture quality, but the most daunting part was that we only had a matter of days [to do it],” said costume designer Lou Eyrich, who recreated Gianni Versace’s iconic looks for @americancrimestoryfx. Eyrich searched online retailers and vintage shops for original pieces from the design house and for @penelopecruzoficial, who plays Donatella Versace. Head to WWD.com to read how she created the Versace world. #wwdfashion
Only three months after her stellar debut catwalk season, @kaiagerber has inked her first big design collaboration –– with @karllagerfeld. The collection blends Lagerfeld’s Parisian chic aesthetic and the model’s signature West Coast casual style via RTW, accessories, footwear and more. The #KarlLagerfeldxKaia collection will launch in September with a series of events. Get all the details on WWD.com. #wwdnews #wwdfashion
Harrods plans to remove the famous statue of Princess Diana and Dodi Al Fayed from the bottom of the Egyptian escalators and hand it back to Mohamed Al-Fayed. “We are very proud to have played our role in celebrating the lives of Diana, Princess of Wales and Dodi Al Fayed at Harrods and to have welcomed people from around the world to visit the memorial for the past 20 years,” said Michael Ward, Harrods managing director. “With the announcement of the new official memorial statue to Diana, Princess of Wales at Kensington Palace, we feel that the time is right to return this memorial to Mr. Al Fayed and for the public to be invited to pay their respects at the palace.” More on the news, with reporting by @loreleimarfil, at WWD.com. #wwdnews