WOMEN’S APPAREL PRICES INCREASE 0.6% FOR JANUARY
Byline: Joanna Ramey
WASHINGTON — While retail women’s apparel prices in January rose a seasonally adjusted 0.6 percent against December — the fifth consecutive monthly increase — deflation in the sector remains a force, the Labor Department reported Wednesday in its Consumer Price Index.
Compared to January 1996, women’s apparel prices last month were down 1.2 percent. However, the month-to-month increases do reflect a pattern of firming prices as retailers prove more adept at managing inventories, which has resulted in less discounting, according to analysts.
“We’re still not out of the woods,” said Carl Steidtmann, director of research, Management Horizons, a division of Price Waterhouse, referring to the more than two-year-old deflationary cycle women’s apparel has been caught in. “But there are opportunities to edge prices up if you manage your inventory well and sell it without as much discounting.”
Among the women’s apparel categories tracked by the Labor Department, separates and sportswear showed the largest one-month gain, increasing 2.5 percent. The category accounts for 50 percent of the women’s apparel price index and demonstrates the overall trend in women’s apparel of firming prices, a Labor analyst said. On a year-over-year basis, prices for separates and sportswear were unchanged.
Donald Ratajczak, director of the Economic Forecasting Center at Georgia State University in Atlanta, also draws a tie between tightly controlled inventories and retailers being able to maintain higher prices. But he said what’s still lacking is the ability for retailers to discern consumer tastes and post meaningful sales increases.
“There is less to discount and they have managed their inventories better but it would be incorrect to say they have a better read on the consumer,” Ratajczak said.
Another force helping women’s apparel retailers combat price deflation: lessening of competition due to bankruptcies.
“We’re forecasting some improvements in demand but there will also be a further concentration in the industry as more marginal players, particularly specialty retailers, go out of business,” said Sandra Shaber, an economist with the WEFA Group, Philadelphia.
All apparel prices in January were up 0.5 percent for the month and down 0.6 percent for the year, as prices for all finished goods posted a 0.1 percent monthly increase and gained 3 percent over the 12-month period.
Men’s wear prices continued to strengthen, increasing 1.4 percent for the month and up 2.4 percent against January 1996. Girls’ apparel prices were up 0.2 percent in January and were down 3.4 percent over the year.
Other price changes for women’s apparel in January included dresses, which increased 1.2 percent for the month, but were down 1.2 percent against January 1996, and coats and jackets, which posted a 2.2 percent monthly decline, and a 0.8 percent dip over the year.
Prices for underwear, nightwear, hosiery and accessories declined 0.8 percent for the month and were up 0.4 percent over the year, as prices for suits dipped 4.1 percent in January and were down 8.8 percent during the 12-month period.