WASHINGTON — Retail prices for women’s apparel in September fell a seasonally adjusted 0.3 percent against August, as women’s apparel stores continued to struggle with high inventories and price pressures, according to economists.
This story first appeared in the October 17, 2003 issue of WWD. Subscribe Today.
Compared with September 2002, retail prices for women’s apparel were off 2.4 percent, part of a long-term deflationary slide, although women’s prices had risen slightly in the last two months, the Labor Department reported Thursday in its Consumer Price Index.
“Women’s stores are still facing inventory issues and therefore price issues,” said Steve Spiwak, an economist at Retail Forward. “The women’s category is facing more price pressure than the men’s category.”
Spiwak noted that men’s prices, which rose 1.2 percent on a seasonally adjusted basis in September, drove the overall apparel price increase of 0.5 percent in September against August.
“On a month-to-month basis, overall apparel retail prices increased at their quickest pace of the year at 0.5 percent,” he said. “Another big factor driving the strength in apparel prices is a sustained rebound in the stock market. People feel wealthier and are making more purchases of apparel, particularly in the higher-end luxury market.”
Compared with September 2002, however, all retail apparel prices fell 2.1 percent.
Rajeev Dhawan, director of the Economic Forecasting Center at Georgia State University, said, “Apparel prices have been rising over the past few months because the dollar is cheap and that puts an upward pressure on prices. A higher dollar keeps import prices down and apparel prices down.”
Spiwak disagreed with Dhawan on that point, noting that the bulk of apparel and textile imports come from Asia and primarily from China, which pegs its currency to the dollar.
“If a country pegs its currency to the dollar, it won’t be fed through to changes in prices,” Spiwak said.
He noted that the dollar has fallen against the euro, however, which could account for some upward pressure on retail prices.
In the overall economy, prices for all retail goods in September also rose 0.3 percent, driven mainly by soaring gasoline prices. The CPI is the primary inflation gauge and is watched closely because consumer buying accounts for two-thirds of U.S. economic growth.
Among the categories of women’s apparel tracked by the government, retail prices for dresses fell a seasonally adjusted 3.3 percent in September against August, but edged up slightly by 0.6 percent on a year-over-year basis. Prices for outerwear rose 5.2 percent in September, but fell 3.5 percent against a year ago. Retail prices for underwear, nightwear, sportswear and accessories rose 2.1 percent last month and rose 1.2 percent against a year ago. Prices for suits and separates fell 0.9 percent in September and 4.7 percent against September 2002.