BERLIN — Germany’s apparel manufacturers and retailers are breathing a sigh of relief.

This story first appeared in the October 14, 2014 issue of WWD. Subscribe Today.

As questions proliferate over whether Germany, Europe’s economic engine, could be sputtering, the country’s fashion sector is so far maintaining its ground — even if it isn’t growing that fast.

“The bad economic news we’re hearing relates to the entire German industrial scene. The apparel industry, for better and for worse, tends to run around six months behind,” remarked Thomas Raasch, director of German Fashion, the nation’s apparel manufacturing association.

In his view, the darkening economic outlook “won’t immediately affect consumers.” As for German fashion companies, the Federal Statistical Office reported sales grew by 0.3 percent to 3.05 billion euros, or $4.18 billion, in the first half of 2014. Dollar figures are converted from the euro at an average exchange rate for the respective period.

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Federal statistics only include the large firms, Raasch pointed out, “and the mood among the smaller companies is considerably better.” He expects the German apparel industry to close the year with a small gain. Apparel export figures weren’t cited, but he said that at the most recent CPM fashion fair in Russia, German labels had widely varying sales results, from 30 percent minus to business as usual. “Russia and the Ukraine are used to crises, and this is not the first crisis nor will it be the last,” he stated.

It’s all relative, as German economics minister Sigmar Gabriel suggested on a German TV talk show Sunday night. He said economic growth in Germany is robust compared with the rest of Europe, and declared that “in a difficult global economic environment, Germany is still well positioned.”

Jürgen Dax, director of the German Apparel Retailers Association, concurs. “Germany is indeed relatively robust. There may be a slowdown, but we are still on a high, high level. It makes no sense to be nervous,” he said.

September retail sales were down around 8 percent, said Dax, resulting in a flat year-over-year performance as of Oct. 1. “That’s not great, but it’s also not dramatic. In part it had to do with the overly warm weather, but naturally also with all the crises going on in the world, whether it’s the Ukraine or ISIS. At the moment one’s not feeling the effects in Germany, but it’s not clear what will come.”

Nonetheless, he said retailers and manufacturers are planning a normal Christmas season, providing things remain quiet politically. And with heating oil and benzine prices currently going down, German consumers have more in their pockets to spend on other things.

Still, the worries are growing worldwide that Germany is slowing, which could push the European Union down. The DAX, Germany’s most important stock market index of the 30 most actively traded stocks, has skidded 1,000 points in the last few weeks, and fell to a one-year low Friday as negative industrial data and forecasts continued to stockpile. On Monday, the DAX was still trading below the psychologically critical threshold of 9,000 points, closing up slightly at 8,812.43.

Among the factors suggesting the EU’s strongest and largest market is facing a significant slowdown were reports last week from the German Federal Statistical Office, Destatis, showing exports fell 5.8 percent in August. Industrial production also slipped 4 percent, new orders in manufacturing 5.7 percent, and manufacturing turnover 2.6 percent in August, compared with respective gains of 1.6 percent, 4.9 percent and 0.9 percent in July.

Further fueling recessionary fears, the nation’s four most influential financial institutes — IFO, DIN, RWI and IWH — scaled back their 2014 national annual growth forecasts from 1.9 percent to 1.3 percent. Next year doesn’t look better, with the institutes now expecting gross domestic product to increase only 1.2 percent in 2015 compared with their earlier prognosis of 2 percent growth.

Clouds are also building up on the consumer horizon. According to the GfK Consumer Climate report for September, the mood of German consumers worsened for the second consecutive month in light of ongoing geopolitical conflicts, weakness in the euro zone and possible stagnation in the German economy. Economic expectations continued to decline and income expectations also fell slightly, though the indicator remained significantly above average, GfK pointed out, reflecting Germany’s stable labor market and rising real income due to low inflation.

“Fears of recession are a little ahead of the game,” commented Michael Burda, professor of economics at Berlin’s Humboldt University. “But uncertainty in the economy tends to hit investment in capital goods, which is what Germany produces.”

Nonetheless, he said in his opinion, the financial indicators tend to overreact. Moreover, stock markets are never really on target, he remarked. “They tend to be jittery and overreact, too. But obviously, things have happened in the last few weeks to hurt Germany. The Ukraine crisis spilled over to Russia, which hurt German business, and there were surprises from China, which hit car orders and machinery — classic German exports. And the final straw was that the southern European countries aren’t taking off yet.

“But I’m actually optimistic,” he went on. “It depends on what the dollar does. It’s important for the dollar to strengthen,” not only putting German exports in a more favorable position, “but a stronger dollar would help southern Europe, which would thus help Germany.”

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