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Apparel Sales Off 1.3% in July

WASHINGTON — Clothing and accessories store sales fell 1.3 percent in July, giving up half the seasonally adjusted 2 percent gain in June, the Commerce Department reported Tuesday.<br><br>Compared with July 2001, clothing and accessories store...

WASHINGTON — Clothing and accessories store sales fell 1.3 percent in July, giving up half the seasonally adjusted 2 percent gain in June, the Commerce Department reported Tuesday.

This story first appeared in the August 14, 2002 issue of WWD.  Subscribe Today.

Compared with July 2001, clothing and accessories store sales were up 1.7 percent to $14.47 billion. At department stores, sales in July fell 0.1 percent and fell further by 1.7 percent year-to-year to $19.04 billion.

Discounters continued to show strong, healthy sales. Sales at general merchandise stores, which includes mass retailers, rose 0.3 percent last month and surged 6.2 percent against July 2001 to $38.43 billion.

“Apparel sales will pick up, but it will be a very volatile recovery,” said Rajeev Dhawan, director of economic forecasting at Georgia State University. “As the dollar becomes weaker, the cost of imports will go up and most apparel is imported.”

John Mothersole, a senior economist with the WEFA Group, said lower import levels are consistent with the depreciation of the dollar, which has been falling since the beginning of the year. He said he expects to see a “relative shift” in the import-domestic goods ratio.

“Import prices are going up a little and people will buy a little less there and start buying more domestic goods,” Mothersole said.

Rosalind Wells, chief economist at the National Retail Federation, pointed out that July is traditionally a slower month for retail, as stores transition to fall inventory with clearance sales.

Retail sales overall rose 1.2 percent in July and were up 4.6 percent compared with the year-ago period.

“The data today helps reinforce our take of a very slow rebound, but one that is still on course,” Mothersole said.

He said the good news is that inventories remained under control, which means in spite of “relatively tepid sales,” margins improved a little.

Dhawan said consumers’ “personal disposable income has been rising at a strong rate over the past six months.” He said he does not see any evidence of a double-dip recession, although the overall economy is a “bit soft.”