NEW YORK -- Women's inventories this spring look fresh, fashion-right and a lot more colorful, softer and feminine than last year's crop -- yet consumers aren't biting.
That's the message from many of the nation's top retailers, who in interviews last week seemed baffled by the downturn in women's sales since Easter, particularly in sportswear. "The apparel business has gotten tougher over the last six weeks, but parts of men's wear have been good and home furnishings have been outstanding," said Michael Gould, chairman and chief executive officer of Bloomingdale's.
"The merchandise looks good. It's just not turning," added Joseph Cicio, chairman and chief executive officer of I. Magnin, referring to the sportswear business at the stores during May. While designer sales have been good, sportswear has been "terrible," he added.
And Leslie Wexner, chairman and ceo of The Limited, said women's sales were strong this year until Easter, but acknowledged a slowdown since then. He said it could be due to rising interest rates or weather factors, but admitted, "We're scratching our heads."
Wexner and others expect a pickup for fall, possibly beginning in July, when the cooler-weather goods hit the selling floors, but the current sluggishness will be reflected in May sales on Thursday, when major retailers issue the results for the month.
"It's got nothing to do with a lack of attractive fashions," said retail analyst Kurt Barnard. "It's demographics and economics. America is getting older, staying at home more and entertaining more at home, so people need less diversity of clothing and less expensive clothing. Also, dress codes at work have relaxed, meaning less money is being spent on clothing."
Some women's areas and labels are holding up, however. According to Cicio, in the last two weeks, I. Magnin's catalog sold 402 Betsey Johnson full-skirted tank dresses, priced $140; 379 high-heeled sandals by Ellen Tracy, priced $135, and 451 mock turtleneck ribbed silk sweaters in such colors as cantaloupe, moss green, ivory or black.
Bloomingdale's Gould cited special sizes and handbags as strong.
Dayton's, Hudson's and Marshall Field's, Dayton Hudson Corp.'s department store division, had a strong first quarter in women's apparel, with comparable-store sales ahead of last year's by 5 to 6 percent, but May sales have been poor, according to Marvin Goldstein, president and chief operating officer."We don't know why," he said. "It's the same basic strategies and the same merchandise."
Goldstein noted that business had begun to turn around in the last few days of May, which would put the month slightly ahead of last year. He said moderate sportswear, petites and dresses were the strongest categories.
Janet Gurwitch, executive vice president of Neiman Marcus, said April sales overall were "OK," posting a gain in the mid single digits, but designer merchandise was up in the double digits, she noted.
"April has not been quite as strong as February and March, but May has been strong," she said. "We have not noticed falloffs in women's apparel business. The key category is soft dressing, soft suiting. Bestsellers are long sweater tunics over soft print skirts, and designer dresses and suits.
"If there has been a challenging area it's been in shorts, T-shirts and vests," Gurwitch added.
Another fashion merchant said, "May has been disappointing and confusing. I just don't know why."
He said bridge sportswear has dropped 8 percent, and noted that's one area where retailers have been building inventories.
"Retailers were more hopeful in early spring," said Isaac Lagnado, principal of Tactical Retail Solutions, a research and consulting organization. "But [the sales decline] is a hiccup, not a fundamental change in direction." Lagnado's explanation: "Housing sales and auto sales are still strong, and installment credit is still up. These forces are drawing away from discretionary income."
Lagnado agreed with Gould that home goods are selling while apparel isn't, noting, "It's unusual. This kind of inversion normally lasts about a year. At this point, we are roughly in the 18th month, where home is strong and apparel is in the dumpster. On that basis, we are poised for a good apparel cycle in the third and fourth quarters. We think fall will be good, with fall one [the part of the season starting in July] OK, and the fourth quarter fine. Employment is undeniably strong and women are ready to replenish their wardrobes."
"The country has kind of slowed down," said David Dworkin, chairman and ceo of Carter Hawley Hale Stores, based in Los Angeles. He said business during April dropped 2.8 percent, largely because Easter fell on April 3, drawing the holiday business into March.The first two weeks of May were soft, but that the second half seems stronger, he said.
"In California, it's been unseasonably cold," he said, citing 40 to 50-degree nights and much rain until about two weeks ago.
His explanation for the slowdown: a change in priorities and a greater concern with financial markets.
"People are watching the financial markets and the tightening interest rates more closely," he said.
At the annual meeting of May Department Stores Co. on May 20, David C. Farrell, chairman and ceo, said consumers have pulled back on spending, crimping women's apparel sales in the previous 30 days. Sportswear, he said, was "not as strong as we'd like to see it."
Since mid-April, he said, sales have fallen from the buoyant performance of the first quarter, largely owing to concern over federal income tax hikes and rising interest rates. He said dresses and suits in misses' and petite sizes were the hot spots in the business.
At the Dillard Department Stores annual meeting the following day, chairman and ceo William Dillard Sr. described the women's business as "extremely sick."
"It has to be that consumers don't like the styles or the prices. Whatever the reason, they're not buying," Dillard said.
Not all the news was bad.
The women's division of J.C. Penney Co. bucked the sluggish sales trend in April and beat its projections for the month, according to Jim Hailey, president of the division.
"We had a big loss the first week of April because a year ago was Easter, but we made up that loss and had a good month," Hailey asserted. "We had a record Mother's Day -- the best we've ever had by far."
He declined to elaborate, but said sales momentum is continuing this month, when the women's division is expected to finish with at least a 5 to 7 percent sales hike.
Best performing categories include cosmetics, suits, intimate apparel, fashion and fine jewelry, sleepwear, petites and large sizes.
At Sears, Robert Mettler, apparel group president, said women's business has been good, though the Northeast has been a bit behind the chain's overall performance. Juniors and dresses are leading the way, followed by sportswear. Slipdresses, bare and vintage looks have been strong in the dress category, as well as long and short column dresses.In the mass market, retailers said they noticed the softness in sales from about the last week in April through the first two to three weeks in May. They attributed it mainly to the weather, and somewhat to income tax bills.
Skip Chustz, senior vice president of apparel for Shopko, Green Bay, Wisc., said business started to get a bit tough the week before Mother's Day. Although accessories and basics have performed well, seasonal business has been "a challenge" because of the cooler weather, he said.
Recent bestsellers include shorts, basic T-shirts, denim jeans and silk camp shirts, which were "a surprise," since silk had been in a downturn, he said. He added that business should turn around as the weather improves.
Peter Thorner, president and chief operating officer of Ames Department Stores, Rocky Hill, Conn., said, "Discretionary income at the end of April and early May went to pay taxes, but that's not indicative of what's coming for the rest of the year. Last year was bad for apparel, and people won't postpone apparel purchases two years in a row."
Jeans, he said, have been strong, but the rest of casual sportswear has been soft.
Gary Vasquez, senior vice president of advertising and marketing at Caldor Corp., Norwalk, Conn., concurred that sales of women's apparel, particularly summer wear, have been difficult, and he attributed it to cool weather in the Northeast. Dresses, however, have been "wonderful," particularly long, flowing styles and palazzo silhouettes. He added that rompers are expected to be strong going into the summer.
Alberta Ferretti's "Rainbow Week" sweaters are back. The designer closed her #MFW show with a few day-of-the-week sweaters, which first debuted on the catwalk last January as part of the pre-fall 2017 collection. #wwdfashion (📷: @delphineachard)