Marketers of mass-market apparel are evenly split on both their reports on spring business and their expectations for full-year retail sales.
According to a quarterly survey of soft goods suppliers by Capital Business Credit, 50 percent of respondents said their spring business was better than a year ago while 50 percent said results were flat or down. Among those experiencing an improved spring, the majority saw year-on-year growth of 3 to 10 percent.
Likewise, 50 percent expect retail sales this year to be up while 50 percent anticipate they will be flat or down. More specifically, 47 percent expect business to be slightly better than in 2012; 3 percent indicate it will be significantly better; 33 percent expect it to be about the same, and 17 percent expect it will be down.
Andrew Tananbaum, executive chairman of CBC, noted, “Consumers are spending less money on nonnecessities due to the new payroll tax. In order for retailers to get ahead in 2013, they will have to depend more heavily on discounting than they had in the past.”
The suppliers surveyed predominantly sell to mass merchandisers and discount stores.
Forty-eight percent of the importers surveyed said they were concerned about the new tax guidelines. Almost three-quarters — 72 percent — said they had received reorders for spring merchandise, while at the same time 58 percent of the sample indicated that their retail accounts were pressing for more concessions from them than they had a year ago.
“I think the new normal is that the consumer — right now and for the foreseeable future — isn’t very bullish on apparel, accessories and footwear,” Tananbaum said, “and won’t be until they feel more secure about their jobs and the economy.”
He said anxiety is particularly acute among customers who depend on mass channel retailers. “We can say that the branded business — the names we all know who sell to the department stores — are all doing fairly well and you can see that in their year-on-year figures. The department store business has been pretty steady.”