Slow holiday sales prompt clothiers to pile on discounts
It’s beginning to look as if the entire mall is on sale this holiday season.
Apparel retailers, who fill the majority of nearly any mall, are offering Black Friday-worthy deals in December. In the past two weeks, clothing retailers have begun discounting not just selected items but their entire stock.
And forget wimpy discounts of 10 or 20 percent. Abercrombie & Fitch, Hollister, Banana Republic, Armani Exchange, Coldwater Creek, J. Jill, J. Crew, Lands’ End and Torrid have all offered storewide discounts ranging from 30 to 50 percent.
Apparel, usually considered the reliable star for every holiday shopping season, is dimming almost as badly as during the recession of 2008, said Simeon Siegel, an analyst at Nomura Equity Research.
“What makes it even more troubling is that it’s happening at a time when consumers don’t feel that bad,” he said. “Home products, toys and electronics are all selling well.”
Experts point to several reasons for fashion faltering. There isn’t any new trend, like colored denim or peasant skirts, luring shoppers into stores, causing many retailers to be overstocked. Apparel sales fell 0.2 percent in November while other sectors increased more than 1 percent, according to monthly Census Bureau figures.
Shoppers got distracted by the sound and fury of the great deals advertised this season in electronics, toys and jewelry, said Burt Flickinger, managing director of the Strategic Resources consulting firm in New York.
“At a time when we’re supposed to have one of the coldest winters since 1962, mercantile retailers missed the mark,” he said.
The weather is to blame for poor overall sales last week. Storms in the Midwest and Northeast caused brick-and-mortar sales to fall 5.4 percent and shopper traffic fell nearly 26 percent, according to ShopperTrak.
But the most common scapegoat for holiday woes this year is the shortened season, with fewer shopping days than usual between Thanksgiving and Christmas. While some retailers can hold onto stock after the holidays, apparel retailers have to move it out to make way for spring merchandise that starts to arrive in late December and early January.
It’s a challenge for all clothing retailers. Even big-box chains are experimenting with category discounts in apparel. Target slashed 40 percent off all regularly priced apparel and accessories in a select group of 89 stores in northern California during Thanksgiving weekend, according to Amy Koo, an industry analyst at Kantar Retail.
Consumers expecting Black Friday-style discounts in November and December are certain to put a squeeze on profits.