Retailers Suffer From The Slob Trend

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Includes: AMZN, GPS, JWN, KSS, LULU, M, NKE, RL, SKT, TGT, TLRD, UAA, WMT
by: Dana Blankenhorn

Summary

The trends of athleisure and dressing down are killing mainstream clothing retailers.

T-shirts and jeans have replaced jackets and ties.

A symptom of middle-class collapse.

Macy's (NYSE:M) is getting crushed. So is Kohl's (NYSE:KSS). Ditto for Gap (NYSE:GPS) and Nordstrom (NYSE:JWN).

What do these names have in common?

Clothes.

It's no secret that Americans have become more frugal since the Great Recession. Manufacturing jobs are still scarce and low paying. Farming is a dead loss. If you're involved in anything dealing with market friction, like selling insurance, real estate, or even money, there's an app for that and your job is under threat.

If you're one of the lucky ones, if your job involves technology or research, these have been very good times. But you don't need a big wardrobe to code. Tech executives are notoriously dressed-down, with jeans and polo shirts considered almost formal wear. Even Dilbert no longer wears button-down shirts.

So what's happening is simply that Americans are saving money by becoming slobs. We no longer shop, we buy. We can buy at Amazon.com (NASDAQ:AMZN) and we can buy at Wal-Mart (NYSE:WMT) or Target (NYSE:TGT). Walk in, grab jeans, shirts and underwear, and walk out 10 minutes later.

I was way ahead of this trend. As a freelance writer, I have been wearing t-shirts to work since the 1980s. Most of these shirts are free, acquired at trade shows for a few moments' attention. I wear jeans and, in the summer, shorts.

I am no longer considered strange. Walking home the other day, I passed a man dressed in a suit and tie, his only concession to the 2010s' trends a backpack that could have been worn by his kid. Naturally, he was a lawyer. When the courts start allowing polo shirts, Tailored Brands (NYSE:TLRD) (the artists formerly known as Men's Wearhouse and Jos. A. Bank) may finally get that Chapter 11 it's been searching for. Only luxury names like Ralph Lauren (NYSE:RL) seem immune to the carnage.

I have been looking at old family pictures lately, taken around the time of my wedding, when my wife's family was near the age I'm at now. Every man is wearing a button-down shirt. Every woman has a full wardrobe. Some people in the pictures wear necklaces and other jewelry. They are also about 30-40 pounds lighter than the people you might see in contemporary pictures (We're not only slobs but pigs).

There are exceptions to the trend. I'll pay $100 for a good pair of sneakers. Women do indeed wear yoga clothes to the grocery store. It is funny but true that brands like Nike (NYSE:NKE), Lululemon (NASDAQ:LULU) and Under Armour (NYSE:UA) are replacing all the fancy clothes of old.

If you have been in the activewear stocks, you may now be going to the bank in your activewear. These stocks have been sizzling for years, and may continue to do so. But they won't sizzle as they have before, because most activewear is easy to find at discount (Tanger Factory Outlet Centers (NYSE:SKT) is a good yield stock for those playing the trend).

Can this trend change? Yes, it can, but it will take a shift in attitudes toward dress, and some serious money in the hands of middle-class people around the globe. So don't hold your breath (in your activewear).

Disclosure: I am/we are long AMZN.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.