February 2010 laps performance a year ago that was generally regarded as having benefited from warmer weather that drove sales of Spring product. Yet, last week, the big-box retailers that reported Q4 results generally suggested that sales were relatively strong… despite record amounts of snow across the country that historically dampens sales.
Therefore, consensus comp store sales estimates for February 2010 are all over the map. Even though no one will likely provide updated EPS guidance, Thursday will be an interesting day!
Let’s assume that comp store sales are relatively strong in February 2010. How could this be? We’ve yet to hear a logical explanation other than February 2009 was the “credit crisis bottom.” While possible, let’s explore three issues that may have boosted sales in February 2010 relative to the conventional wisdom.
* Liquidation sales a year ago sapped traffic from the remaining big-box retailers (e.g. Linens, Circuit City, Mervyn’s, Gottschalk’s, etc.). The relative lack of liquidation sales this year has helped the big-box retailers. If so, many big-box retailers will “hit a wall” in the April/May 2010 timeframe. If the liquidation thesis holds water, will big-box retailers outperform specialty retailers tomorrow?
* GPS discussed a topic on its conference call last week that may help explain why sales did not fall off a cliff in February 2010. Retailers have had a full year of operating with limited inventory and fine tuning their promotional cadence to optimize revenue in this “new normal” environment. Have they simply fine-tuned their promotional models this year to most effectively drive traffic/sales?
Quote from Sabrina Simmons on the GPS Q4 2009 conference call last week:
“We are lapping a lot of promos we did last year, and we actually learned a lot and we know now which promos are more effective. We plan for those. We bought into them.”
* Finally, most retailers are using their social media marketing to drive snowbound consumers to web sites. In addition, consumers have certainly become more accustomed to purchasing from the Internet channel over the past 12-18 months and we’ve seen this in almost all the growth rates of retailers that supply this data. It’s possible that weather will no longer have the material impact on sales trends that the industry has come to expect (most retailers include Internet sales in their comp store sales calculation).
At the end of the day, February 2010 sales release Thursday may be the most unpredictable in recent memory.
Where is the Hip-Hop Customer Shopping Today? The Answer May Surprise You.
Wednesday, March 3rd, 2010It’s no secret that brands specifically targeting hip-hop culture have been down-trending for years. But where is this niche customer shopping today?
As brands such as Sean John began to offer less embellished or “expressive” fashions, many hip-hop customers found temporary solace with “bling” brands including Affliction and True Religion over the past few years. But brightly colored and embellished clothing is quickly being traded-out for quieter, preppy fashion.
The inclination towards a preppy aesthetic was largely led by designer logo-intensive brands such as Lacoste and Polo Ralph Lauren. But we’ve finally seen a shift in the hip-hop customer shopping cleaner, preppy brands across all price-points. Interestingly, we’ve noticed an influx of African-American shoppers at teen retailers American Eagle and Hollister of late.
Hip-hop websites even highlight American Eagle, Aeropostale, and Levi’s alongside traditional hip-hop brands, Apple Bottoms, Southpole, and Baby Phat as “most popular” hip hop brands today.
http://www.hiphopclothingonline.info/
Hollister, Aeropostale, and AE are listed as “hip hop” brands today on some web sites
Posted in Commentary | No Comments »