As the apparel industry convenes in Las Vegas for the spring 2010 trade shows this week, a cloud of uncertainty continues to hang over the U.S. economy — keeping buyers skittish and making it tricky for vendors and retailers alike to plan for the season. While there are some promising signs of an economic rebound — the stock market is up over 50 percent since March — consumer spending remains anemic, causing industry executives and observers to remain cautious in their forecasts. At the same time, the economic headwinds have forced savvy companies to implement creative strategies to ride out the storm.
Total sales at Stüssy, for example, have dipped about 10 percent this year, but the company planned its business accordingly. “For the past two seasons, we’ve scaledback purchases and didn’t try to go after reorders or chase business,” said Frank Sinatra, president and owner of the Irvine, Calif.-based firm. “We knew there were going to be credit holds on some of our retailers and buyers were going to get nervous and cancel some orders.”
The sales dip at Stüssy is mirrored in industry-wide figures. For the first six months of this year, total apparel sales declined 7 percent, to $84.8 billion, according to NPD Group figures. The U.S. Census Bureau, which includes accessories in its figures, reported a similar slide through July 2009: Total apparel and accessories sales dropped 6.9 percent to $110.3 billion in the first seven months of the year.
These decreases come on top of contractions in 2008. Last year, total apparel sales fell 3.6 percent to $199.4 billion according to The NPD Group. By category, men’s wear sales declined 5.6 percent to $54.12 billion, women’s wear sales slipped 3.1 percent to $109.36 billion, and children’s and infant’s sales dipped 2.2 percent to $35.91 billion.
“Apparel has been one of the most heavily hit industries in this economic downturn,” said Marshal Cohen, chief industry analyst at NPD . “When you do the math, apparel is bigger than the auto industry, but where is our ‘cash for clunkers’ bailout? Where’s ‘cash for clothes?’”