Weekly Top 5 – Five Articles Worth Reading

Fashion Industry Struggles Over Pricing

The article asks how long can manufacturers and retailers hold off raising prices? Instead, we’re of the belief that retailers will need to lower their merchandise margin expectations in today’s deflationary/promotional environment.

Fears Grow Over Pakistan Textiles

Check out the comment from JCP’s VP of Strategic Sourcing. She suggests that Pakistan’s flooding woes have forced companies to “use finer yarn counts, which are more expensive, and that makes you reconsider your country mix where you produce your fabric as well.”

Costco Targets Mall Space to Expand Its Reach

We’re curious how profitable these traditional mall locations are versus COST’s standard suburban stand-alone venue?

Holiday Outlook Dims as Economy Struggles

It’s always interesting to hear analysts and CEO’s providing bullish commentary re: future sales trends. In this article, several retailers and analysts are expecting +2% to +4% sales gains this Holiday season. SKS CEO Stephen Sadove believes that his company will report +MSD comps in the Holiday season. Our crystal ball is much more bearish. Lower margins will negatively impact the top-line and the sector will be lucky to report flattish sales versus LY.

Luring Shoppers to Stores Marketers Try Interactive Mirrors, Discounts via Scanners

While we’re entering a new age of retailing, it’s worth remembering that these new strategic initiatives don’t come cheap and will limit opportunities for profitability improvement.