Women’s Wear Daily had an article stating that “Retail Execs Brace for Lingering Weakness” in the coming months. It’s a long list of losses and poor sales and stores closing or going bankrupt. Now as a consumer you might say, “Hey what do I care?’ Well darling if no one makes the clothes you won’t have anything to wear. So you might pay attention before you end up wearing a potato sack to work.
You see there has been a major correction in the market. Particularly in the plus-size market. Many if not most of the companies that dipped their toe into the plus-size market have run away and won’t be doing anything for the fall. One major supplier that did a dozen dresses will only do four for the fall. Another that did 10 dresses is not doing any. Not one. A big vendor that specializes in blouses told me that Bloomingdales cut their buy so much that they have to scramble to find enough small stores to justify cutting a plus ticket. An already limited market is contracting even more than ever before. So the product will be very, very limited this fall.
The article in Women’s Wear gave a lot of facts and figures. For example, Limited Brands, Inc (which sells Victoria’s Secret) announced that their profits fell 27.2% which is quite significant and reflective of the industry as a whole. Most retailers are hoping that consumer confidence will return and that there will be an upswing in sales going into the prime holiday season. KMPG the accounting firm did a survey which showed that most retailers expect better times ahead. The article states that “Seventy percent of retail executives …expect business conditions to improve next year with 68% predicting stronger revenues and 66% forecasting better profits.” That is all well and good but if the vendor is taking a cautious approach to providing new product, there will be a much narrower range for you to pick out new clothes for the holidays. Next years profit projection won’t help you when you need a new dress for your company’s Christmas party.
When I was at the tradeshows in the beginning of August I spoke with many vendors who said that they were selling but that the volume was lighter than usual. Every vendor stated that they were doing very well, but they would not let go of your ankle until you put in an order. That is because most of the stores that were in trouble have already gone under. The survivors continue to buy judiciously and maintain lower inventories and try to limit their risks. That is bad news for consumers as supply and demand factor into most of the pricing decisions that a retailer will make and smaller inventories means fewer choices for you.
What I have found is that even the small contractors who make clothing are folding left and right. I would estimate that 30% of them have gone out of business in the last six months. Now in the real world, going out of business sometimes just means moving across town and starting a new corporation, but it does seem that quite a few firms have closed up shop. That makes it much harder to have your clothes sewn here in the USA instead of farming out to China or Vietnam as most of the major labels do to cut costs. So fewer contractors means fewer options and ultimately fewer choices for you the consumers, which are not mass produced lowest common denominator polyester junk. My sources on the West Coast tell me that where 1500 contemporary lines were producing clothes in the LA area now only about 150 are doing something for the fall. That means a great deal of factories and small shops are closing or severely contracting their work force. What some of them are doing is firing their best workers who make the most money and are the best sewers. They would rather use cheaper unskilled labor that are basically automatons that push the machines back and forth like they are canning tomatoes. Because that is cheaper than paying someone who knows what they are doing. Thus the final product resembles the stuff produced in China which is just fine with most of the big corporations because they are really only looking at the bottom line.
The only way to turn it around is for consumers to go out there and buy some clothes. Quality clothing that is made in America. Try to avoid the cheap stuff if you can and support those lines and stores that give our manufacturing base a chance to survive. I mean you know you need a new outfit or two. Go out this weekend and check out the back to school specials. Fall is right around the corner and we need to get the market moving again.
Are you going to change your spending habits this fall?