The following is an interesting article at WWD (and to view the article in its entirety, click here):
Specialty Retailers Seek Best-Selling Items in Tough TimesWhat are your thoughts on the article? Do you agree/disagree with the list of what customers still want in their retail purchases? Are you surprised (or not surprised) to see that the Victoria ruffle cami (Item 99742, $88.00) is a best-seller at J.Crew?
by Whitney Beckett
October 22, 2008
What’s selling for fall? Not as much as previous seasons, specialty retailers agree.
Women are shopping less and evaluating more closely what they are spending money on, faced with a dim macroeconomic environment. That’s pushing comp-store sales down around 12 percent at many mainstream specialty retailers, including J.Crew, Talbot’s, Ann Taylor and White House|Black Market.
“We’ve seen it all this month — deep discounts, incremental promotions and sales, early friends and family days, repeated e-mail blasts. Specialty retailers have been pulling out their entire bag of tricks in the desperate hope of convincing the reticent shopper to spend,” said Catherine Sadler, president of the New York marketing firm Catherine Sadler Group. “But, as we all know by now, it hasn’t worked. September sales plummeted. According to recent traffic studies, traffic is down by close to 10 percent — and, I suspect, still falling. Next will come inventory cutbacks as these same retailers desperately try to preserve their eroding margins and reduce the risk of leftover merchandise. Net net — everyone is girding for what could be the worst holiday season in two decades.” ...
Sadler said newness and differentiation are the only saviors this season, pointing to J.Crew’s higher-end line (“accessible luxury could just be what the doctor ordered, when luxury is no longer attainable”) and Ann Taylor Loft’s washable products conceived in partnership with Procter & Gamble (“to a certain customer, not having to pay for dry cleaning bills may be just the ticket right about now”).
Based on early fall best-selling items as reported by retailers, customers still want:
• Classic items with a twist.
• Versatile pieces that transition from office to evening.
• Seasonless fabrics, with nearly year-round shelf lives.
• Tops that can move from outfit to outfit.
• Newness that surprises her and that she doesn’t already own.
• Solid price-value relationships.
At J.Crew, that means an $88 heather ruffle cami has been the apparel bestseller. “It has that element of surprise we all need these days — it has a layered ruffle and pleating detail that makes a plain old ruffle seem boring,” said creative director Jenna Lyons Mazeau. “Customers want something special — a reason to buy — a sense of quality as well as style. The more unique and special pieces are, the more sought after and talked about.”
After J.Crew’s second-quarter earnings fell 12.2 percent, mostly due to unexpected computer-system upgrades, the 212-door retailer lowered its profit guidance for the year to between $1.44 and $1.54, down from previous guidance of $1.70 to $1.75 a share.
Banana Republic eked out a slight increase in second-quarter sales to $599 million from $596 million last year, but comparable-store sales declined 6 percent. Gap Inc. improved its second-quarter earnings by 51 percent by carefully controlling costs and inventory.
As Gap Inc.’s best-performing brand celebrates its 30th anniversary, the “quintessential pieces…that have defined our heritage” — a $225 khaki trenchcoat and a $175 tie-neck black dress — have been the 594-store chain’s bestsellers this fall, according to a spokeswoman. ...
But even for the best positioned, the retail pie is getting smaller, as consumers feel the strain of devalued stock portfolios, higher commodity prices, lower home values, tighter credit and general economic uncertainty and pessimism. And retailers that saw strong second-quarter results did so before the bottom truly fell out of global financial markets — spooking even the hardiest consumer.
“There’s nothing wrong with J.Crew, Club Monaco or Banana Republic, but they have to be on their A-game with wonderful product combined with unbelievable value,” said consultant Emanuel Weintraub.“ At best, stores will meet reduced expectations, not their prior expectations.”