Holiday Sales Of Clothing Expected To Remain Weak

So far, scarves and sweaters don't seem to be very high on Santa's list this year, according to a new analysis from Deutsche Bank.

Based on its analysis of consumer trends in the days following Thanksgiving, Deutsche expects a decline in comparable store-sales of 4% for its apparel retail index in November.

And overall, the Deutsche report found subdued buying behavior, which means holiday results for these retailers don't look promising. "The apparel retail segment has been challenging for market share shift reasons, and also for macro reasons recently," it says.

"November sales for apparel retailers are not necessarily a proxy for holiday," writes analyst Gabrielle Kivitz. "The kick-off to the holiday season has mixed implications for apparel retail companies, as post-Thanksgiving shopping patterns reflect bargain-hunting rather than real holiday season shopping demand."

This year, the report notes, post-Thanksgiving shopping sprees are skewing increasingly toward big splurges like electronics or the special promotions and great deals at big-box retailers.



Some stores in its index are likely to do better than others. Of the clothing stores in its index that are considered Black Friday players --those appealing to lower demographics, including Aeropostale, Victoria's Secret, Bath & Body Works and Charlotte Russe--"Aeropostale was a standout with traffic and execution," the report says.

Earlier this week, Aeropostale reported strong results for the third quarter, and says its fourth quarter is also looking good. "Over the important Friday and Saturday following Thanksgiving Day, we achieved mid-single digit comparable-store sales increases compared to a mid-single digit increase last year," executives say. "We currently expect our November comparable store sales to increase in the mid-single digits range."

And Talbots, which tapped Publicis as its new ad agency earlier this week, says that while comparable-store sales fell 8.2% at Talbots and 6.5% at its J. Jill brand, there are "greatly improved comparable-store sales trends in the month of October for both brands, as compared to August/September."

"In our own store checks on Black Friday, we generally observed consumers demonstrating restraint," the Deutsche report says. "When we observed individuals in the cash wrap lines, a noticeable and common observation was that customers generally were holding one or two (mostly one) low-ticket items, despite storewide promotions. Also, the frequency of customers with handfuls of shopping bags was low."

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