NEW YORK — There’s no sure thing in fashion.

This story first appeared in the September 22, 2004 issue of WWD. Subscribe Today.

That longtime axiom of the apparel business has been born again, in research indicating that from December 2003 to May 2004, a larger share of Hispanic adults shifted purchasing to lower-priced brands of clothing than did non-Hispanics. The finding, conveyed in a recently divulged WSL Strategic Retail Pulse report, cuts against the grain of Hispanics’ greater-than-average willingness to pay higher prices for better-quality fashion.

In fact, 25 percent of Hispanics surveyed shifted purchases of clothes they wear to work to lower-priced brands in the six months designated by WSL, while 21 percent of the group did so for leisurewear — more than twice the levels of non-Hispanic consumers who curtailed apparel spending in that manner. Only 10 percent of non-Hispanic consumers shifted purchasing to less costly clothing brands for work, and 11 percent bought less pricey leisurewear labels, WSL reported.

“Hispanic shoppers tend to shop for fashion and beauty items more often than non-Hispanic consumers, but economic factors give us a clear view of why [some] are trading down,” observed Wendy Liebmann, president of WSL Strategic Retail.

Liebmann was referring to the results of WSL’s Hispanic Shopping Life study, which show that from December through May:

  • 24 percent of Hispanics saw someone in their househollose a job, compared with 14 percent of non-Hispanics.
  • 18 percent experienced improvement in their financial status, versus 25 percent of non-Hispanics.
  • 76 percent became more careful about spending, against 60 percent of non-Hispanics.
  • 53 percent postponed major purchases, compared with 32 percent of non-Hispanics.
  • 32 percent canceled or postponed a vacation, versus 19 percent of non-Hispanics.

Despite the apparent trading down, the growth forecast for some Hispanics’ disposable income means the group’s generally robust appetite for fashion is unlikely to wane anytime soon. Although the U.S. employment picture remains volatile and gasoline prices remain high, the Selig Center for Economic Growth is projecting Hispanic buying power will reach $778 billion in 2005, topping that of African-Americans, whose buying power is anticipated to hit $773 billion next year.

And the trading down by Hispanics was not across all segments. Just one product category besides apparel — coffee — saw the same share of Hispanics trade down to lower-priced brands as did apparel worn to work, or 25 percent. Those segments were followed, in incidence of trading down, by hair care, with 23 percent of Hispanics saying they switched to less costly labels; household cleansers, 22 percent; pet food and treats, 20 percent, and personal care products, 15 percent.

In each of those five categories, the share of non-Hispanic consumers choosing less expensive brands was at least 50 percent smaller.

The WSL data were drawn from an online survey of a nationally representative sample of 1,000 adults age 18 and older, including 63 Hispanic women and 46 Hispanic men.

At least one Hispanic marketing specialist, Luis Garcia, president of San Antonio, Tex.-based Garcia360, had a different take on these findings than WSL, however. “Hispanics may not see buying a lower-priced brand as a trade-down,” Garcia said. “They may see it as an ability to get more — a desire not to be taken advantage of, to get the best deal.”

Indeed, 37 percent of Hispanics are planning to spend much more or somewhat more on apparel, shoes, or accessories for themselves over the next year or two, according to Columbus, Ohio-based management consultant Retail Forward. Only one racial or ethnic group polled in March for Retail Forward’s ShopperScape study, African-Americans, comprises a greater portion of people planning to boost such spending through 2006, at 38 percent.

By comparison, 31 percent of Asian-Americans said they’ll be spending more on fashion items over the next year or two, as did 17 percent of all whites.

In the 12 months ended this July, for example, Hispanics registered the biggest percentage increase in spending on apparel among a handful of racial and ethnic groups, according to NPD Fashionworld. Hispanic consumers spent roughly $8.2 billion on women’s clothing in those 12 months, marking a 10 percent increase on spending of about $7.4 billion a year earlier. That hop came as growth in overall consumer outlays for women’s apparel edged up just 0.4 percent in the period, totaling approximately $93.1 billion, compared with $92.7 billion in the 12 months ended July 2003.

And despite the recent switch to lower-priced brands of apparel by between one-fifth and one-quarter of Hispanics, WSL found the group is taking no less interest in its personal appearance: More than one-third of Hispanics surveyed, or 37 percent, were spending more time on personal grooming and exercise than they did five years ago. That share is a substantial 13 basis points greater than the 24 percent of non-Hispanics who reported devoting more time to those endeavors.

To some extent, WSL’s findings point out that different researchers often turn up different data when asking the same question. To wit: STS Market Research found in the 12 months ended this April that the average price Hispanic women paid for a piece of sportswear was $22.98, or $1.11 more than the $21.87 averaged by American women overall.

— V.S.

WOMEN’S APPAREL SALES BY RACIAL AND ETHNIC GROUP
Group

Sales ($000s) in the 12 Months Ending

% Change
Jul-03
Jul-04
Whites
$70,866,080
$70,723,800
-0.20%
African-Americans
$11,425,540
$11,009,450
-4%
Hispanics
$7,404,292
$8,150,266
+10%
Asian-Americans
$838,762
$904,697
+8%
Native Americans
$248,671
$255,992
+3%
Other
$1,496,422
$1,626,851
+9%
Not reported
$552,416
$451,226
-18%
Total
$92,730,570
$93,122,300
+0.40%
Source: NPD Fashionworld
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