Luxury retailers are being hit the hardest in this downturn. More depressing news from apparel manufacturers below--except jeans, which seem to rise above all trends. Looks like luxury and consumer discretionary ETFs can expect more pain:
From Gap Inc.'s FQ308 conference call: (GPS)
The luxury segment has been the segment as we look at the business in the larger context, it has been the most severely affected. As we think about Banana Republic and its accessible luxury position we think they are ideally positioned in the market to be able to play to that financial impact that has affected the luxury consumer and also the psychological impact. So we believe that is a unique opportunity for Banana Republic.
Q: It feels like [the Banana Republic] brand is slipping a little bit and I’m wondering if there is something fundamental going on at Banana Republic or if you think it is just natural with respect to the luxury customer?
A: Banana Republic up until most recently when we saw their traffic really start to drop off into the third quarter..
From Casual Male Retail Group's Q308 conference call: (CMRG)
It’s interesting to note that CMRG has two Big and Tall chains that cater to different demographics. We’re seeing that Rochester Clothing, our higher end luxury concept has felt the impact of the current economic situation to a much greater degree than the Casual Male. This seems to be consistent with the results reported last week by the higher end department stores, such as Neiman Marcus (NMG), Nordstrom’s (NYSE:JWN) and Saks (NYSE:SKS).
Are jeans the exception?
Our brand is very strong and we just think there’s a lot of potential for us from a market share perspective. You look at other companies that have premium denim business that’s been around for more than 20 years, you think like a Diesel, Diesel is doing well over $1.5 billion on a global basis. So, we think there’s a lot of potential out there for us to continue to grow and it’s really driven by the product and the consumer’s appetite for the product and that’s what’s driving the sales growth we’ve had especially over the last four quarters.