The NPD Group reported that the total US apparel market's sales decreased 5.2% in 2009, with sharp declines across all segments: The firm noted that although sales continued to decline during the holiday season, there was relative improvement as women’s apparel (only) posted a 3 percent decline from the prior year in the fourth quarter:
The NPD Group reported that the total US apparel market's sales decreased 5.2% in 2009, with sharp declines across all segments:
The firm noted that although sales continued to decline during the holiday season, there was relative improvement as women’s apparel (only) posted a 3 percent decline from the prior year in the fourth quarter:
For the fashion industry this is a very important sign. "As go women shoppers, so goes the total fashion market,” said Marshal Cohen, chief industry analyst at The NPD Group, Inc. “Women represent just over 50 percent of total fashion market sales and they account for an additional 25 percent in the purchases they make for others…without them a true recovery will not occur."
There were some bright spots last year, however – growth in sales of jeans (+3.5%), dresses (+2.3%), bras (+1.1%), tights (+2.4%), and men’s underwear tops (+11%) show there are some items consumers aren’t willing to give up despite being on a tight budget.
Denim has proven surprisingly recession-proof in the 4th quarter 2009, even including even the uber-premium brands, as evidenced by the extremely strong sales reports from True Religion (NASDAQ:TRLG), Joe’s Jeans (NASDAQ:JOEZ), and VF Corp (NYSE:VFC) (who manufactures 7 for All Mankind).
Another good sign was that apparel sales that were attributed to middle-income consumers (those with incomes of $25,000 to $75,000) were roughly flat in 2009 compared to the prior year, according to NPD’s Consumer Tracking Service:
To put it in perspective,” says Cohen, “the total market declined 5 percent while middle income consumers held fast. That means the recovery is beginning to show up in the apparel market for the very critical middle income consumer.
Other demographic groups did not fare so well: spending attributed to upper income consumers dropped 9% and teens spent 20% less in 2009 versus the prior year. The latter is hardly surprising given that teen unemployment rates continue to hover above 25%.
Recently, we have seen sequential improvements in monthly and quarterly same-store sales results from the majority of retailers we cover. Expect this trend to continue, but keep in mind that results are up against extremely easy comparisons to last year and hardly represent robust growth.
Consumer surveys over the past few months indicate shoppers are still very concerned about their own personal finances, and this morning’s personal income and spending report is hardly encouraging for those hoping income gains will help sustain recent spending increases – real disposable income fell 0.6% in January, the largest decline in seven months. Cohen cautioned:
Don’t be fooled into thinking that we are out of the woods, just yet. Between “frugal fatigue” and pent up demand, the consumer is spending, but we will likely see a lull in February and March as they wait for their credit card balances to recover from holiday and January sales. Then, come the change in the weather, late March and April, consumers will likely be assessing their wardrobes and opening their wallets a little bit, again.
Disclosure: No positions