Spring sure isn't looking good. Have you ventured to a department store lately, or check out the deserted boutique lined streets? They are dead. The number of mannequins at Saks outnumber shoppers. Salespeople are ready to pounce as soon as you walk through the door.
In yesterday's NYTimes was an interesting article pointing out, retailers are in for another bad season.
“Last year you’d run in here and say, ‘I need these shoes, they’re going to sell out,’ ” said Stacey Widlitz, a retailing analyst, as she turned over a strappy Fendi sandal
in the Saks shoe department on Tuesday. “You felt an urgency. Now you come in and the store looks more like a museum than a department store and you think to yourself, I can wait.”
If consumers learned anything during the last Christmas shopping season, it was that if they sit on their wallets long enough, they could eventually snap up elite brands for fire-sale prices.
February retail sales at Neiman Marcus, Saks and Nordstrom were some of the worst in the industry. Barneys New York, which does not publicly report monthly sales, is seriously ailing. Moreover, high-end stores order their spring merchandise months before the season arrives. So while they were able to cancel or return some orders as the economy plunged into recession last year, their inventory is not yet in line with weakened shopper demand.
That means more discounts are on the way, but don't expect them to be as spectacular as they were at Christmastime. That is partly because luxury chains have managed to trim at least some of their inventory. Some designers said they are still
smarting and deciding whether they will continue supplying certain chains.
Kit Yarrow, a consumer psychologist in San Francisco, said affluent consumers are returning to an older way of shopping: buying one or maybe two exceptional pieces rather than a designer’s entire line. “That used to be the way people bought luxury items,” she said. “They didn’t buy the T-shirt from Armani. They bought the jacket.”
Retailing professionals are not in agreement about whether this economy has irrevocably changed consumer spending habits.
The “aspirational” shopper — the customer who could not afford designer brands without skipping meals and running up debt — has disappeared. For more than a decade, global brands like Louis Vuitton and Gucci rode to glory by selling this customer a taste of prestige — a $600 handbag instead of a $3,000 dress. Now that strategy is being severely tested.
“It’s not to say luxury is dead forever,” said Robert S. Drbul, a managing director at Barclays Capital Equity Research. “It will come back. But it may take a few quarters. It may take a year. It may take something longer than that.”
Read "For Spring Clothes, a Lost Season?"