WASHINGTON — It’s been a nervous year so far on the financial fronts, but economists contend that the fundamentals are in place for moderate to healthy apparel buying as 1994 progresses.

The stock market has been riding a roller coaster, consumer confidence keeps churning, worries about inflation persist despite sanguine statistics and interest rates are moving up. Still, the economists say, the overall economy is moving ahead, and the apparel business should see some benefits.

“Apparel sales are going to grow with growth in the economy,” said Marie Beninati, director, retail market strategy with Kurt Salmon Associates, a New York consulting firm. “If income increases, retail sales go up almost proportionately.”

Economists are generally forecasting economic growth of between 3.5 and 4 percent in 1994, modest inflation of about 3 percent and unemployment falling as low as 6.2 percent by December, compared with March’s 6.5 percent. Higher interest rates — as long as they don’t get too high — and a recent surge in purchases of big-ticket items should blunt demand for houses and cars, leaving more spending money available for apparel.

The economists foresee little impact on apparel spending due to recent gyrations in the financial markets.

“If I were a retailer or a manufacturer, I’d say first of all, if the stock market doesn’t cause a general overall decline in the economy, the demand factors are going to be good because the economy is expanding,” said Martin A. Regalia, chief economist of the U.S. Chamber of Commerce here.

“A correction in the financial markets does not necessarily mean people won’t buy, especially that they won’t buy clothing.”

He adds, however, they might be deterred from shopping the top-priced luxury lines.

Although news of plummeting stock values tends to make consumers, even noninvestors, uneasy, the primary income stream for most people — their salary — is far more important to spending, economists said.

“Mainly, individual investors are riding it out. It’s speculators who are affecting the market right now,” Regalia noted.

The economists interviewed also advised businesses to keep a closer eye on unemployment reports rather than on those monthly measures of consumer confidence, the University of Michigan’s index of consumer sentiment and the Conference Board’s consumer confidence index.

Consumer confidence often lags behind improvements in economic activity, even as consumers are spending more, economists said.

In February and March, when indicators such as retail sales and employment rose, the Michigan index turned down. The Conference Board index dipped in February, but in March it hit its highest level since July 1990.

“Consumers are too fickle — today he feels lousy and tomorrow he feels good,” said Regalia.

News reports of layoffs can send consumer confidence into a tailspin, even if there is net job growth, several economists said.

Rosalind Wells, an economist with NPD Group Inc., Port Washington, N.Y., a market research firm, uses consumer confidence reports “as confirmation of other things I see, [but] employment and income are the basis of everything.”

Spending on apparel in most cases is even less affected by consumer confidence than some other commodities, according to several economists.

“Confidence has always made much more of an impact on the big purchases, like cars and homes,” said Sandra Shaber, an economist and vice president with the WEFA Group, Bala Cynwyd, Pa., an economic forecasting center.

“People may tell the pollsters they’re not very optimistic because they’re worried about health care or the long-term future of the economy, but that doesn’t really prevent them from buying a new article of clothing.”

Still, while the economic signs are favorable, economists noted there are other trends at work that cloud forecasts in the apparel business.

One, they say, is the increasing popularity of dress-down Fridays, which could effectively eliminate one-fifth of the need for office wear. Another is the much-discussed aging of the baby boomers, who, market-watchers say, are thinking more about saving for retirement and spending time with their families than about stocking their closets with business suits and generally splurging on clothes, as they did a decade ago.

“I really don’t think it’s going to go back to the way things used to be in the 1980s,” said Beninati of KSA. “I think people are value-driven and I think that’s embedded, I really do. Apparel sales and apparel manufacturers are still in a very competitive environment.”

Others agreed that pricing will remain a key factor for all but the luxury markets.

“In the third year of an economic recovery, people ought to have the money and confidence to buy apparel and accessories,” said Shaber.

Shaber forecast an increase in spending on women’s apparel of an inflation-adjusted 3.4 percent this year over 1993, com-pared with 3.3 percent growth last year against 1992.

“There’s potential for more than that; it depends on pricing,” said Shaber. Because of price pressures, Shaber expects shoppers to continue moving from specialty retail stores to department and general merchandise stores.

But others, noting strong March sales gains, believe some specialty stores already are seeing the results of better prices and more interesting formats. Ira Silver, chief economist with J.C. Penney Co., Dallas, forecast 5 percent growth in apparel specialty store sales in 1994 against 1993, adjusting for inflation and seasonal changes, compared with 2.45 percent last year over 1992.

But more demand for apparel does not necessarily mean retailers should build new stores, Beninati and Shaber warned. The U.S. is overstored, they said, which is one reason many retailers are scraping along as consumer spending steadily rises.

The key, according to Beninati, is to go after market share by offering better services, particularly nonstore shopping.

“Life is so much more complex now. The consumer is time-poor. The consumer is saying, ‘Look, I don’t want to go to malls, I don’t want to stand in line.”‘

More and more shoppers, especially young people, are comfortable shopping with their computers, fax machines, television or telephone, she added.

Another way for retailers to increase market share is to improve automation of their inventory, Beninati noted.

In a recent survey conducted by her company, not a single retailer was managing its stocks well enough to meet customers’ needs, “not even Wal-Mart.”

“So there’s tremendous room for improvement,” she said. “It’s a merchandising question, a logistics question, a technology question. it’s really how you run your business. I think that’s the key to profitability and success in retailing. You wouldn’t need warehousing and backup stock. It would be far more effective and profitable.”

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