According to a monthly pricing survey conducted by retail equity analyst Eric Beder of Wunderlich Securities Inc., the top three specialty retailers “that may be best-positioned [for] success in the early fall selling season” are Abercrombie & Fitch Inc., Urban Outfitters Inc. and Guess Inc.
Beder’s analysis examines the average unit retail price of specialty apparel retailers — including the teen and contemporary segments. He said in his report that the “month of August is a period of transition in the specialty apparel retail sector, with the final stages of summer seasonal sell-through ending, and retailers’ transition to ‘back-to-school’ season beginning.”
“As such, the greatest insight offered in the period, via the observation of retail pricing, is the necessity and cadence of inventory clearance initiatives during the final full month of the summer which, as an extension, may clarify the competitive positioning of surveyed retailers entering the critical back-to-school selling season,” Beder noted.
Framed by that research perspective, Abercrombie, Urban and Guess came out on top and are in the best position for the fall season. Beder also noted that in this month’s report, the year-over-year AURs were bifurcated between high- and low- price specialty apparel companies.
“In the teen sector, this division was extremely clear; every retailer with an average unit retail level below the surveyed average produced year-over-year AUR declines, while all retailers above the segment’s average AUR level, produced positive [year-over-year] pricing trends,” he said.
The results of this month’s pricing survey reiterates Beder’s contention “that, above all else, a strong, well-followed, engaging brand is critical for long-run success in the current specialty retailer marketplace.” Moreover, Beder said companies that have maintained “a core, loyal customer base have been successful in generating consistent pricing efficacy.” Meaning, these shoppers will pay for a desired brand.
With Abercrombie, Beder acknowledged that he has concerns, but that the retailer “continues to produce solid pricing performance, producing a 4.2 percent year-over-year AUR gain in August that extends a nine-month streak for the teen retailer.”