Ho-hum fashion hinders holiday sales
A shaky economy and expensive gas may keep consumers from seasonal splurging, but there's another factor: no big fashion trends.
NEW YORK (Fortune) -- Sure, the economy is weakening, the housing market is slumping and gas prices are soaring, all of which weaken holiday shopping demand. But analysts say there is another reason why shoppers aren't splurging: Not enough new fashion.
Must-have fashion bolsters retail sales by making people feel their current wardrobes are out of date. That was the case in 2003, when color made a comeback and suddenly the black and gray of the previous decade looked stale. It happened again in 2004, when lady-like styles such as boucle jackets and ruffled blouses replaced the utilitarian looks of prior years. And again, in 2005, when a bohemian wave, marked by peasant skirts and tunics, flooded stores. Most recently, in 2006, there were skinny jeans and baby doll dresses -- styles that ushered in a whole new silhouette known as the "inverted triangle."
By comparison, 2007 has turned out to be somewhat of a fashion dud, according to analysts and retailers who parse the trends. For instance, of the 43 retailers tracked by Thomson Financial, the 13 who sell apparel posted the worst November sales results.
"What concerns me more than any of the macro-economic issues is the lack of excitement in fashion right now," said Marshal Cohen, the chief industry analyst with NPD Group, the market research firm. "As a retailer, if you are telling me the biggest trend out there is skinny jeans, good luck trying to grow your business."
Clothing still accounts for a majority of holiday shopping, although it has been losing ground in recent years. Some 54 percent of shoppers said they planned to purchase clothing this holiday season, according to a survey of 1,943 consumers conducted by NPD in September. While that is down from the 59 percent who said they intended to buy clothing last year, it is still well ahead of consumer electronics, the next largest category.
Aside from holiday gift staples like scarves and basic sweaters, shoppers are left with few alternatives for hot new fashion items. "The current clothing styles appear very similar to what we have seen in stores throughout the past year," noted Jennifer Black, a retail analyst, who recently completed an extensive tour of mall-based specialty retailers.
It's not just analysts who are lamenting the lack of exciting new fashion. In explaining why women's apparel was one of the softer categories during the third quarter, Karen Hoguet, the chief financial officer of Macy's, told a group of analysts "there does not appear to be enough in the fashion offering that is compelling."
Are complaints about ho-hum fashion just another excuse drummed up by retailers to explain lackluster sales? While some might overuse such explanations to mask other problems, factors such as fashion and the weather are a real part of the larger landscape - including the economy and even politics - that affect shoppers' buying habits. When it's 50 degrees in December, consumers don't rush to buy winter coats. And when there is no sweeping fashion trend, consumers "tend to make do with what's already in their closets," said Adrienne Tennant, an analyst with Friedman, Billings, Ramsey.
But fashion victims (and retailers) take heart: The spring season is on the horizon and with it comes a fresh batch of styles to tempt consumers. Spring is an important season, because it often sets the tone for the entire year. For instance, Brit Beemer, founder of America's Research Group, said that only 20 percent of the 1,000 consumers he surveyed in March said they would buy spring apparel in 2007, down from the 60 percent who said they planned to purchase apparel in the spring of 2006 - leading him to conclude that this would be a difficult year for clothing sales.
So what's on tap for spring 2008?
Kathryn Deane, president of trend forecaster Tobe predicts that longer, more fitted blazers and geometric patterns will be two big looks for spring. It's unclear whether these styles will be exciting enough to ignite sales. But Deane is betting the new looks will get people shopping. "You are going to want to wear lots of prints," Deane said. "Anything solid will feel out of date."