Spending on apparel at retail is undeniably down, but if April is any indication, things could be looking up — or at least flattening out.

A number of retailers and brands, including Kate Spade, VF Corp. and Under Armour, are expected to release the results of their first quarter of 2017 in the coming weeks, and Wells Fargo’s senior analyst Ike Boruchow said retail appears to be settling into a valley of sorts.

Despite a 15 percent traffic boost so far in April, after seeing double-digit declines in February and March, Boruchow noted that “trends going forward are likely to normalize” and said the future for apparel retailers “appears better than it did just a few weeks ago,” according to a research note.

Kate Spade, for example, which is still expected to sell its business (Coach is a front-runner and Michael Kors is said to have shown interest) despite a recent delay in negotiations, still has a “healthy” business, Boruchow speculated, even with a bumpy start to the year.

Even without being spared from industrywide volatility and plans to sell, Kate Spade (Fall 2017 collection pictured above) is likely still a “healthy” business, according to Wells Fargo. 

He added that Kate Spade’s evaluation period was extended so any potential suitors could consider its first-quarter results, which could have an impact on negotiations.

“Based on our store work and industry checks, we believe Kate saw volatility throughout their quarter (much like the rest of retail) but still maintained positive comps and took market share,” Boruchow said.

Nevertheless, Wells Fargo dropped its assumption for Kate Spade’s first quarter comp store sales to 2.5 percent growth from an earlier expectation of 5 percent growth.

Things are less certain for VF Corp., which holds brands like Vans and The North Face. Despite investor sentiment leaning negative on VF and the company dealing with industrywide volatility, Wells Fargo does not see less-than-stellar first quarter results in line with company projections as cause for alarm.

“Following several quarters in a row of top-line misses, we see Q1’s flat organic growth plan as reasonable,” Boruchow said.

He’s more “cautious” when it comes to Under Armour, which has been hit hard by slowing growth.

“Although expectations for Under Armour have certainly come down over the past six months, we believe fundamentals remain choppy and we would not try to call the bottom here,” Boruchow said.

Things may be on their way to evening out for some retailers, but it is too soon to tell for Under Armour. 

He went on to note the continuing competitive pressures by Adidas and Nike and said the wholesale market Under Armour is facing “remains tough” and questioned the likelihood of the brand meeting its full-year guidance of 11 to 12 percent growth.

“Although there are a handful of reasons why things may get better later this year…we find it hard to envision upside potential to guidance.”

As for the dip in sales troubling so many retailers, often seen as a recent development in consumer habits, Boruchow took on that notion by delving into decades of personal consumption data gathered by the government since 1960.

Looking at the data as one set, Boruchow said apparel and footwear “have actually been long-term wallet-share donators,” falling from 8 percent of consumer spending to just 3 percent today.

Reasons for the decline rest mainly in other, more necessary areas of the economy growing in cost and eating into discretionary spending. Health-care spending has grown to 21 percent from 6 percent and similarly, the more recent advent of personal technology has taken over about $420 billion worth of spending. Clothing and footwear spending accounts for about $385 billion.

Even taking the long view, Boruchow found evidence that since 2013, there has been a quicker erosion of spending on apparel and footwear, mainly caused by more spending on big-ticket items, like housing and cars, and less spending by tourists.

“All in… multiple categories appear to be slowly chipping at the wallet share owned by the clothing and footwear industries,” Boruchow said.

For More WWD Financial News, See:

Agent Provocateur Hits Bankruptcy in U.S.

Vince Delays Financial Results, CEO Warns of Default ‘Scenario’

Retail Sales Keep Falling in March, Cementing Slow First Quarter

J.C. Penney, Dillard’s Expected to Pull Through Retail Reckoning

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