Blacks Retail Report

Luxury Apparel
August 2007

Table of Contents

• The Big Picture
• Fall Start
• Summer's Set
• Blacks Bottom Line

The Big Picture

Despite July’s uptick in new home sales and durable goods orders, concerns about the strength of the U.S. economy persist. The housing market slump and subsequent withdrawal of lenders has made it harder for consumers to borrow money. At the same time, oil prices remain high, putting a further squeeze on consumer spending.
While the overall economic picture is cloudy, high-end apparel merchants remain unaffected so far. As we predicted, early fall business has been strong, especially for unique, luxury items.

Fall Start

All indications point to another banner beginning of the season. We’ve seen sharp sales in knitwear, cashmere and outerwear as tops continue to drive early business. Cloth outerwear is trumping leather and the most popular pieces have novelty treatments.
Men’s clothing has taken on slimmer cuts this season but the change in silhouette is subtle and not as fitted as some predicted. The narrow suits touted for younger men are selling, but in very low volume.

The rising costs of Italian goods has put pressure on retailers in price sensitive regions, but most East and West Coast merchants are seeing little change in demand. What has changed is retailers’ selection of units. Merchants can’t afford to buy a broad size range with such high prices.
In women’s wear, dresses continue to outsell all other categories. The dress and tights trend we saw so much of last year has faded. Tights will still be worn out of necessity in cold weather, but they're not as much of a “look” as they were previously. The same is true of the dress and boot trend.

Shoulder scarves will be an important accessory item this season so we’re expecting strong add-on sales in this category.

In footwear, we’re seeing a lot of burnished or scuffed leather on men’s shoes and boots. We’re predicting that boots will be another hot men’s trend this season, shown with a flat heel and a rounded pointy toe.

Summer's Set

Retailers have done a pretty good job at clearing out their spring/summer merchandise and are in the process of wrapping up their clearance sales. At this point in the season, S/S goods should constitute no more than 20 percent of your inventory. If you’re exceeding this number, you could be in trouble. Get help with your merchandise planning now to avoid these situations in the future.

Blacks Bottom Line