WASHINGTON — Heavy discounting and falling gas prices gave consumers a reason to buy clothing in June, boosting retail sales across the board in the apparel specialty store, department store and general merchandise store categories, according to a U.S. Commerce Department report Thursday.
June apparel and accessories store sales rose a seasonally adjusted 0.7 percent to $18.8 billion compared with May, while sales at department stores were up 1.4 percent to $15.6 billion. Sales at general merchandise stores, which include discounters and department stores, increased 0.4 percent to $52.4 billion last month. The government report followed better-than-expected comparable-store sales reports from retailers last week.
Compared with a year earlier, specialty store sales gained 6.5 percent, as department stores posted a 0.8 percent sales increase and general merchandise store sales were 4 percent higher. Overall retail sales advanced 0.1 percent after falling 0.1 percent in May, beating economists’ expectations of a slight decline.
Jack Kleinhenz, chief economist at the National Retail Federation, said, “Knowing that shoppers remain concerned about the economy, companies have already begun offering aggressive promotions to entice shoppers.”
Chris G. Christopher, senior principal economist at IHS Global Insight, agreed that retailers were aided by sales promotions in the second half of June.
“Falling gas prices have helped them out, as well,” Christopher said. “But the overall picture on the retail market is very dismal and personal consumption adjusted for inflation does not look good.”
Christopher cautioned that the sales gains may be temporary because he feels consumers overall are not doing well.
“The employment numbers are just terrible,” Christopher said, pointing to the increase in the unemployment rate in June to 9.2 percent. “The stock market and housing prices are not doing well and household net worth will probably take a hit in the second quarter.”
On the other hand, Kevin Regan, senior managing director at FTI Consulting, said: “There seems to be a resilience in retail sales. [The] debt-to-income [ratio] has improved and now consumers are deciding they can do things and enjoy themselves and spend a little more.”
But Regan said the outlook is still clouded, as retailers brace for inflationary pressure on margins from higher cotton prices they paid earlier in the year.
“We know that cotton prices are going to take effect and retailers have already gone on record that pricing will be more difficult,” he said.
While fall merchandise is expected to feel the sting of high cotton prices paid earlier this year to make the apparel, prices for the raw material have moderated in recent months, reflected in the Producer Price Index released by the Labor Department on Thursday. Wholesale prices for U.S.-made apparel rose 0.2 percent in June compared with May and were up 2.6 percent against a year earlier.
“Since their most recent peak in February, raw cotton prices have fallen 14.1 percent,” said Gregory Daco, principal U.S. economist at IHS Global Insight. “That is a substantial decline that is bound to help apparel producers."
@chanel and @pharrell dropped what’s being dubbed as the world’s most exclusive sneakers yesterday. The Adidas Originals NMD Hu, which Williams designed in collaboration with Chanel and @adidasoriginals, has a waiting list of over 120K people who pre-registered online at chanelatcolette.fr –– and only 500 pairs are on sale. The singer predicted the resale value of the shoes could reach $40K. Read the full interview on WWD.com. Link in bio. #wwdfashion
@imanshumpert is diving deeper into his creative endeavors and relaunching his clothing line, Post 90s, and is helping to raise money for the hurricane victims in St. Maarten with a jersey he’s designed with his brother. The Cleveland Cavaliers player talked to WWD about kneeling during the national anthem, working with fashion brands and how he wants to be more than an @nba player. Read the interview on WWD.com #wwdfashion (📷: George Chinese)
Not only does #TheProfit return to CNBC tonight, but @marcuslemonis has launched @shopmarcus, a new shopping and lifestyle retail experience in Aspen and Chicago, with more locations to come. The retail stores offer in-store stylists and a variety of contemporary womenswear selections.
“It’s life, I’m going to face it,” @mingxi11 sighed. “I fell, but you know, I think the most important thing is that I get back up. I had the love, the help from my sister — the girl next to me Gizele [Oliveira] — she’s so nice. When I went backstage everybody was trying to comfort me like ‘Oh Ming, it’s OK.’ I’m really, really touched. I think it’s them who gave me the courage to go back on stage for the finale,” Xi told WWD of her fall at the @victoriassecret fashion show. (📷: David Fisher) #wwdfashion #vsfashionshow #victoriassecret
@louisvuitton tapped @therealpeterlindbergh for its latest city-centric photo book, which is part of a series called Fashion Eye. The primarily black and white book captures the spirit of Berlin in 57 images shot between 1989 and 2019. “Berlin is an inspiration for me, more than a city. I mean @millajovovich is simply Berlin!” said Lindbergh. #wwdfashion
“You know, I think audiences expect a certain performance so I have to deliver to them what they’re expecting to a certain degree. But I’m also a different actor and a different person, I have my own spin on the character,” says @noahegalvin of his takeover of the leading role in “Dear Evan Hansen” following the departure of @bensplatt, who originated the role. Read WWD’s interview with the 23-year-old actor on WWD.com #wwdeye (📷: @jilliansollazzo)
For pre-fall 2018, @etro created richly-colored wonderland, using tapestries, textiles and wallpapers from the Eastern world at large. The line featured floral and graphic prints and jacquard motifs, like this two-piece look featured here. #wwdfashion (📷: Giovanna Pavesi)
@kith is moving into children’s. The men’s and women’s streetwear brand has launched Kidset, a Kith kids line located in New York at 64 Bleecker Street. The line includes mini versions of staple Kith pieces like the Astor bomber jacket and the Kith box logo sweatshirts, along with a wall that can display up to 120 pairs of shoes from @adidas, @newbalance, @timberland and more. #wwdfashion
“I just wanted to create this fully rounded character, but I do think what excited me most was just the opportunity to give a group of people representation that I feel needs it. I like to do characters in projects that stand for something and Karolina definitely does, so that was really exciting to me,” @ginnygardner says of her new role in @hulu’s “The Runaways.” Gardner plays Karolina Dean, a queer superhero, which is a rarity for @marvel. Read more about Gardner’s character on WWD.com #wwdeye (📷: @dandoperalski)