FED FINDS APPAREL PRICES STEADY, SALES UP AT RETAIL IN JUNE, JULY
Byline: Carol Emert
WASHINGTON--Retail apparel sales improved in most of the country in June and the first half of July, although competitive pressures continue to hold prices down, according to a Federal Reserve survey of economic conditions released Wednesday. The survey, known as the Beige Book, is conducted every six weeks by the Fed's 12 district offices. In the New York area, discount stores reported sales gains of 7 percent to 10 percent, compared with June and early July of last year. "Managers at these stores commented that sales were good across the spectrum of men's, women's and children's apparel," the report said. New York's mainline department stores, on the other hand, generated disappointing sales increases of only 0.5 percent to 5 percent, compared with the same period of 1993. Those stores reported "increased difficulty moving apparel, some unwanted inventory accumulation and the consequent need for markdowns and sales," the study said. Cleveland area retailers reported the opposite trend: strong sales at department stores and sluggish movement at mass merchants. Apparel specialty stores brought up the rear. While department store sales growth averaged about 5 percent against June and July of 1993, discount retailers saw mixed results, as sales were spread thin between increasing numbers of new stores entering the market. "Specialty stores, especially apparel outlets, continue to lose ground in year-to-year comparisons, although monthly declines are diminishing," the Fed found. However, some unidentified specialty retailers saw significant growth in catalog sales, "in most cases double-digit improvement from last year," the report said. Meanwhile, in New England, retailers reported moderate growth in apparel sales in June and July, although "prices and gross margins remain relatively flat and inventories are intentionally lean." Northeastern store managers were optimistic about the fall and holiday seasons, projecting sales growth of between 5 and 12 percent over the comparable 1993 period. "Encouraged by a perceived rise in consumer confidence and new mall developments in the region, some companies are planning increases in employment to staff new stores or [to expand] existing stores," according to the report. Philadelphia retailers were optimistic that apparel sales will pick up when fall fashions hit the racks, although several said that spring and summer women's fashions failed to attract consumer interest, according to the survey. Even with a back-to-school boost, second-half apparel sales are expected to increase only slightly against the second half of 1993. In the Atlanta area, discounts and promotions sparked a revival in apparel sales in June and July, after a sharp drop in April and May. Area retailers surveyed were more optimistic than in the spring about back-to-school sales, with most projecting improvements of between 3 and 6 percent above the 1993 back-to-school season. California retailers reported sluggish retail sales as the recessionary environment there continues, with prices for nondurable goods remaining low. Mountain states continue to see robust sales. The Dallas area reported an improvement in apparel sales, but noted that sales along the Mexican border remained sluggish. Kansas City stores said June and July sales were better than in the same months of 1993, with apparel cited as a strength by several retailers. Prices "are expected to remain stable for the rest of this year due to competition at both the wholesale and retail levels." Textile and apparel manufacturers in several parts of the country reported stronger demand. Most said they are managing to keep prices stable despite rising pricing pressures. Dallas apparel manufacturers said they have hired more workers and raised wages in response to increasing orders and a belief that the boom will continue. "Apparel input costs were higher, although several producers said that they had not raised their selling prices," the report said. In Atlanta, makers of apparel fabric said they were encouraged by increasing demand. Apparel producers there noted that despite increasing raw materials prices, prices of apparel at retail remain flat. Boston manufacturers reported that they are selling sharply increasing amounts of woolen fabrics. Despite some wool price increases of 20 to 30 percent, competition is keeping prices stable, they said. Textile makers in Philadelphia reported declining demand, even as manufacturers of other types of goods in that region reported a pick-up in orders.
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