NEW YORK — While most jeans vendors reported a rise in first-half sales, they agreed that a big question concerning second-half business will be retail inventories.
As is common during down economic times, many retailers last year cut their stock levels dramatically, leaving them with less inventory than they wanted coming into the spring season. They’ve now rebuilt inventories for back-to-school selling and the question becomes whether b-t-s sales will meet their expectations.
"We were extremely concerned and conservative with our plans for the year," said John Kourakos, president of sportswear at the Warnaco Group, which produces the Calvin Klein brand. "There was a minimal inventory level at wholesale and retail, and there has been a nice spike in this area at retail. We’re chasing business.
"At first, I thought there was concern that it was just purely pipeline filling. But for our business, it was some pipe filling, but more filling of retail response to good sell-throughs."
Jeans vendors have worked at cutting down their stock levels. At the end of May, Levi Strauss & Co.’s inventories stood at $673.5 million of goods, down 13.6 percent from a year ago. At the end of March, VF Corp.’s were at $832.7 million, down 27 percent from a year earlier.
Phil Marineau, Levi’s president and chief executive officer, said store comfort levels with current inventory vary widely.
"It’s highly differentiated by retailers," he said. "In general, relative to our retailers and our business, I think they feel very comfortable with where they’re at. As we go into back-to-school and holiday, we remain committed to the type of inventory levels we need to accomplish our objectives."
VF’s chairman and ceo, Mackey McDonald, said a key strategy for the rest of the year will be keeping stock levels lean.
"That’s what you have to do in this environment," he said. "Cut your costs and lower your inventories and really get yourself prepared."
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