Blacks Retail Report

Luxury Apparel
June 2007

Table of Contents

• The Big Picture
• So Long Summer
• Buy Now, Wear Now
• Fall Fashion
• Blacks Bottom Line

The Big Picture

Consumer confidence waned in June, dropping to its lowest level since August of last year, according to The Conference Board’s consumer confidence index. The drop was attributed to a perceived weakening in the U.S. economy.

Despite this report, specialty retailers are faring well. Early fall merchandise has already landed and we expect early sales to mimic last year's success.

So Long Summer

Summer may have just begun, but major retailers are already on their second round of summer markdowns. Fall collections and high-priced specialty items are filling their floors, offering more margin opportunities.

Specialty retailers should accelerate their markdown schedule to stay in line with the majors. To do this, you should be landing more new merchandise early. Fashion customers are ready to make fresh buys and old inventory just won’t do.

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Buy Now, Wear Now

These “on demand” consumers are actually instigating a new “Buy Now, Wear Now” retail cycle. They continually want new merchandise and it’s up to the retailers to give it to them. Vendors are geared up for this cycle because it ultimately means more business.

To move in this direction, retailers should break their year down into 60-day periods in which you’re buying and flowing in new merchandise. Everyone is facing an on demand business model and it’s important to start the transition now.

Fall Fashion

As fall goods arrive, we expect to see a continued emphasis on dresses and a pickup in the Skirt Suit (Skirt/Jacket) business. Although dresses were the most important trend of SP07, we expect women to look to skirts in SP08 because of their mix-and-match capabilities.

In the men’s market, alternative, loose jackets continue to be a driving force. With them, we expect to see more casual tops and bottoms. Most men now have a closet full of denim (five pocket) and deconstructed jackets and future buys will have to complement this casual base.

Blacks Bottom Line