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Apparel Sales Drop As Fear of War Rises

WASHINGTON — Fears of a war with Iraq and terrorism boosted sales of duct tape, plastic and other hardware goods, but apparel sales sank along with weak consumer spending and flagging confidence in January and February.<br><br>Economic activity...

WASHINGTON — Fears of a war with Iraq and terrorism boosted sales of duct tape, plastic and other hardware goods, but apparel sales sank along with weak consumer spending and flagging confidence in January and February.

Economic activity was “subdued” and retail sales were flat throughout much of the country in January, although Boston, Chicago and Kansas City reported some signs of improvement during February, according to the Federal Reserve Board’s Beige Book, a survey of business executives in 12 designated districts, released Wednesday.

Severe winter weather dropped 1 to 2 feet of snow throughout the Northeast over the Presidents’ Day weekend and “hampered shopping” in the New York, Philadelphia and Richmond districts, the Fed reported.

“Apparel sales were mostly weak, although discounting helped move merchandise in some areas,” the Beige Book reported.

In the New York district, retailers reported sales were below plan in January, but most were not concerned because it is considered a traditional clearance month.

“However, the Presidents’ Day snowstorm had a substantial effect on February sales and [retailers] generally do not expect to recoup those sales for quite some time,” the Fed’s report stated.

The storm shut down scores of stores on what is typically a busy sales day and continued to depress business for two to three days afterward. Apparel sales were described as weak, though outerwear performed better than other categories. Jewelry sales were also a strong point in the New York district.

Home furnishings and electronics sales in Philadelphia, which was also hit hard by the severe snowstorm, were strong, but apparel and jewelry sales weakened.

“Some merchants also noted there has been a sharp decline in purchases by younger consumers,” the Beige Book reported.

Although the winter storm also hit the Richmond district hard, some retailers claimed the downturn might have been tempered by increased Internet sales.

Retail sales in the Minneapolis district were generally flat, but some department stores and malls reported stronger-than-normal foot traffic.

One Chamber of Commerce official claimed retailers in Minnesota were “not complaining about postholiday sales, but they carried low levels of inventory.”

This story first appeared in the March 6, 2003 issue of WWD.  Subscribe Today.