NEW YORK — Though it’s not yet New Year’s, many retailers are feeling hungover.
After a rough and tumble Christmas, stores are hoping the disappointing season can be salvaged over the next few weeks through gift-card redemptions and via steep markdowns, often up to 50 percent, and even higher on outerwear. January, when retailers run big clearances to shed winter clothes and transition into spring fashions, is becoming a bigger and bigger contributor to fourth-quarter sales and profits. If retailers have learned anything from this holiday, it’s that consumers, saddled with historic credit-card debt and higher fuel costs, are getting choosier, and demanding greater values and products of color and distinction when it comes to apparel and accessories. Otherwise, consumers switch their dollars to iPods, digital cameras, Nintendo and PlayStation game systems.
“It was all about items, not assortments,” said Bob Goodfriend, chairman and chief executive office of Goody’s Family Clothing, the Alcoa,Tenn.-based apparel specialty chain. He acknowledged Goody’s may have missed some sales on the hottest items, including velour sets and sweaters and that next year, Goody’s will identify key items before the holidays and stock up for the season. The chain may also seek to bring in more spring goods earlier, since they’re selling well according to Goodfriend.
The concerns among store executives are compounded by the knowledge that as 2005 progresses, they run up against strong results from 2004.
While the improving job market and increased Wall Street bonuses might help the situation, Christmas hardly delivered a hopeful message for the future. There was a pickup in business towards the end of last week, particularly Thursday, though no big rush materialized in the final days. Consumer confidence indicators slipped a bit and the snowstorm in the Midwest last week took a toll on certain locations, such as Chicago, Cincinnati and Columbus.
Still, after strong spring and fall sales trends, there’s no sense of panic that retail profits for the year will be bad, and there have been certain bright spots in the post-Thanksgiving weeks amid the general softening. Luxury retailers made or exceeded goals and, in places like New York, were buoyed by tourism and the resilient stock market. Also, Internet, electronics and gift-card sales accelerated beyond expectations; brooches, premium denims, contemporary sportswear, and ponchos sold well, as did early spring merchandise. Also, stores planned inventories conservatively, so there’s not insurmountable excess.
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