The holiday assortments are set, and they're rich in couture-inspired detailing, dressy looks, color and shine. But the prognosis at retail is cautious and the open-to-buys are conservative.
As retailers look past summer, there is mounting concern about holiday '07, and expectations, at least now, are for low-single-digit fourth-quarter sales gains at best.
"There's an underlying prudence among consumers," said Wendy Liebmann, president of WSL Strategic Retail, which monitors shopper attitudes. "They have big cataclysmic things spinning around in their heads," Liebmann added, referring to terrorism and the Iraq war, wacky weather patterns and politics.
"People don't like not knowing what tomorrow is going to look like," Liebmann said. "Retailers have to be aware of this mind-set. It's going to be a really hard Christmas, And if the merchandise in your store looks like Christmas from last year, consumers won't spend more money."
"We're not bringing that much more inventory in, but we are looking to turn it faster," said Keith Fulsher, senior vice president and general merchandise manager of Dress Barn, which is looking for slight increases going into holiday.
Each year, there's "a shorter and shorter window" for retailers to capitalize on Christmas shopping, said Lisa Rhodes, executive vice president and chief merchandising officer of Maurices, a division of Dress Barn Inc.
She said it had boiled down to the last two or three weeks before the holiday and the week after, "but it can still be a fun and exciting season, if that's how you're strategizing your business," she added optimistically. "The key is to have less inventory at the beginning of November, and big receipts in November so you look fresh, new and exciting for December."
She expects a rush around Thanksgiving, and then a lull in early December, and a surge in the final two weeks or so before the holiday, which has been the pattern of recent past seasons.
For Maurices, as well as higher-price chains, the hope is that shoppers warm to what will be a smorgasbord of bright colors and metallic tones across several categories, and dressier, detailed ready-to-wear that most retailers will merchandise in force after Halloween."Breakout brights usually happen for spring; now it's happening for holiday,'' said Stephanie Solomon, vice president and fashion director of women's rtw and accessories at Bloomingdale's. "It's all about color and shine, and not only with sequins and bead work. It's with iridescent fabrics and trims. It's not glitter. It's discreet. It's modern formality."
Nicole Fischelis, fashion director of Macy's East, said, "It's about shine and all shades of silver and gold. It can be a sequined T-shirt or a bold embellished charmeuse silk blouse or tunic, in jewel colors, or an anorak or parka in metallics."
Anxious retailers are banking on several key factors to lift sales, including:
-- Another big season for gift cards, which keep growing in popularity and reflect an inability by merchants to come up with hot items.
-- Dresses, which have been a strong category this year, particularly party dresses and Empire-waist and baby-doll looks.
-- Accessories that look new and haven't been overdistributed, such as ballet flats, clutches in vivid colors and pumps in exotic skins and with metal buckles;
-- Nonfashion gifts such as scented candles, perfumes, pet garb, gourmet sweets and liquors.
-- The latest technology gadgets, including the Apple iPhone and other items that reflect a convergence of technologies.
-- Knits and cashmere sweaters, but retailers did not emphasize the category as much as in the past.
Holiday concerns in the retail industry are based on the economy, which is perceived as half-good and half-bad. Gasoline prices, at more than $3 a gallon in most states, aren't expected to drop, which will have the biggest impact on low- and middle-income consumers and the discounters and mass chains that cater to them. Americans will be taking fewer drives to the mall, and attempting to make each shopping excursion efficient, ultimately leading to fewer purchases.
The weak housing market, which many experts believe hasn't bottomed out, doesn't help. Home values continue to drop and interest rates are rising.
In addition, a former retail chief executive and an active one agreed that after about five straight years of good business for most retailers, there could be a downturn on the horizon. Last holiday, retailers just got by, reporting a pickup after Christmas that was sparked by gift card redemptions, hefty markdowns on winter products and some full-price selling of resort and early spring collections. That combination enabled them to come close or meet their five-week holiday selling plans for modest gains. But it still made for an overall disappointing December 2006.The positives in place that could help retailers achieve their goals for holiday '07 include strong employment figures, rising wages and a stock market that keeps going up. There's still a healthy demand for luxury goods, and those with differentiated merchandise offered at value prices should do well. At the moderate level, promotions at chains like J.C. Penney are almost guaranteed to be fierce.
Right now, it's the time of year when retailers organize holiday press previews and present a positive front. There's confidence in the merchandise, which reflects efforts to capture leading trends while providing an element of exclusivity, whether that's through private label, exclusives from designers or some trading up, like at J. Crew.
"Because we can't resist, we are introducing a few over-the-top couture quality gifts from the J. Crew collection, including hand-beaded sequined sweaters and a rich cashmere gown," said Tracy Gardner, president of retail and direct. "The holidays will be filled with unique and unexpected gifts at various price points. We love the quirky, fun and clever gifts that make you smile," Gardner said, citing J. Crew's colorful signature printed cardigans, twinkle ballet flats, men's argyle vests paired with "secret" washed shirts and bright cashmere and tartans for both genders.
J. Crew will also showcase stocking stuffers, hair accessories and winter loungewear.
At Saks Fifth Avenue, "We love the whole idea of color in shoes and bags, and we have wonderful gift items such as ballerina slippers and flip- flops from Ferragamo and Tory Burch," said Michael Fink, vice president and women's fashion director.
"We believe in shine for evening, lots of flirty cocktail dresses with loads of sequins and not only in traditional gold and silver, but also in deep blues and vibrant reds." Fink also cited textured knitwear, all-purpose capes and one-of-a-kind jewelry pieces when price is no object, such as diamond necklaces and opal rings.
The holiday season, he said, would be all about "more unique gift-giving, instead of the sweater that comes in 10 colors or the traditional scarf and glove set."
Fink said Saks started loading up on holiday merchandise in November, but the official start is the week of Thanksgiving, when the marketing kicks in. Much of it will revolve around a new children's book exclusive to the store called "Snowpeople" that will be in windows, throughout the store and in catalogues.Based on her shopper survey, WSL's Liebmann believes higher fuel costs and economic concerns are altering shopping patterns, and of all merchandise categories, most of the women in the survey said they would cut back first on accessories, where they have been spending freely for years, and then on home decor. (See related chart.)
Liebmann believes electronic gadgets will be big again, particularly products that reflect "convergence of equipment" like the iPhone. And accessories for those high-tech items will be big. She also predicted pet clothes and gourmet treats like coffee, chocolate and liquors could be winning holiday gifts. However, "beauty will be really challenged, while fragrances will help somewhat. Apparel, while still important, will be somewhat marginalized."
Bloomingdale's Solomon said that in rtw, "There's couture-inspired attention to detail that I love. The influence in couture is returning because there is a new interest in getting dressed up." She also cited colorful clutches and perfume as important as "the finishing touches of dressing up."
At American Eagle Outfitters, "Holiday 2007 is about traveling back to friends and family, revisiting the past through the present," said LeAnn Nealz, chief design officer. "It's all about beautiful textured yarns, cozy first-layer Ts and tanks, and our new wide-leg jeans. Unlike last year's soft, relaxed styling, this year is a little more cleaned up and includes touches of shine and sparkle, perfect for holiday celebrations."
Rachel DiCarlo, senior director of public relations, said American Eagle would put the spotlight on numerous looks and items, including tartan plaids; rugby stripes; cardigans and pops of color; mixing patterns; layering; women's shiny, puffy coats; satin ballet flats in different colors; glazed bags, belts and shoes; satin cosmetic cases; women's tuxedo pants; velvet fitted blazers; Lurex-trimmed knits; intarsia sweaters paired with sweatpants; fleece; crewneck sweaters; Sherpa-lined boots; slipper socks; trapper hats; wool scarves; thermals, and henleys. American Eagle gets two major holiday deliveries, on Oct. 23 and Nov. 22.
At Sears, the private label Apostrophe collection is most important for holiday. Key trends will be soft dresses in jacquards and silks, shine, bubble skirts, rich colors and fabric mixes, according to Lisa Schultz, executive vice president of Sears Holdings Apparel Design.And at Kmart, the Jaclyn Smith collection is very relevant for holiday, offering sweater sets with embellishments, soft fabrics, velour, satin polyesters that feel like silk, soft flowy pieces, sweaters with pearls, easy velour pants and simple tunic tops.
"It's still rich colors, luxurious fabrics, unexpected details and a lot of bubble volume that we see in the collections," Schultz said.
Macy's Fischelis cited DKNY, Calvin Klein, Tommy Hilfiger, August Silk, Joseph A., Nine West, Andrew Marc and Laundry as the labels to be featured in Macy's gift book. She also pointed to high-gloss shoes from Kenneth Cole; metallic handbags from Coach, Calvin Klein and Michael Kors, and minimalist intimates in gold and silver from Calvin Klein as key holiday products.
On the private label side, she listed feminine blouses and tunics in bold prints and charmeuse from Alfani and INC, and cashmere in bold colors and embellishments from Charter Club.
Fischelis also sees fine watches as important, particularly those with big faces, diamonds and gold from Burberry, Movado, Armani, Tag Heuer and Swiss Army. Other potential hot items at Macy's: Lauren Lurex knits and zipped quilted vests; logo sweaters from Hilfiger, Calvin Klein and DKNY, and fur from the Fur Vault, particularly fur wrap jackets, hats, neck pieces and vests.
"Definitely, it's about dressy separates for holiday — they're stronger than ever," said Dress Barn's Fulsher. He also sees plenty of color in the offerings — red, fuchsia, sapphire, cobalt, green and silver on the metallic side.
"We love plush fabric for holiday," he added, as well as cropped jackets, wide-leg pants, romantic blouses with sleeve details, long tunic sweaters and satin party dresses. "There are definitely a lot of new things," Fulsher said.
The mood of the twentysomething crowd is "[somewhat] optimistic, though there is enough newness so people will be compelled to buy," said Maurices' Rhodes. "There is so much happening with shine. For the first time, I've seen the trend translate to casual and dressy."
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