An Anthropologie employee at Fashion Island greets customers at the Newport Beach, CA store on Tuesday, May 26, 2020.
Paul Bersebach | MediaNews Group | Orange County Register via Getty Images
Some of us are saying “see you later” to sweatpants.
In the last week of February, seven of the 10 best-selling items on Anthropologie’s website were dresses, the company, a unit of Urban Outfitters, said this week during an earnings conference call. Up until that point, she said, it was fortunate to see only one or two dresses make the top 10 list.
Urban Outfitters CEO Richard Hayne called the change surprising and very positive.
“Until recently, fashion has predominantly been … casual and comfortable at home,” Hayne said. “We’re starting to see what I call ‘go-out fashion’ starting to take hold. The apparel business will change in terms of the categories we sell.”
Clothing sales fell 19% last year, according to market researcher The NPD Group, as Americans stayed home and concentrated their spending on groceries and other household essentials.
When shoppers were shopping for clothes, comfort was the theme: Sales of sweatpants were up 17% year-over-year and sleepwear by 6%, NPD said. Within fashion footwear, which fell 27% for the year, sales of slippers increased 21% as consumers shuffled. from cooking in the kitchen to making video calls from the bedroom or streaming the latest series from the sofa in the living room.
Retailers such as Urban, Gap, Abercrombie & Fitch, Macy’s, and Nordstrom had to quickly change their merchandise when lifestyles abruptly changed last spring. They pulled tight blazers, skirts and pants off the mannequins, to be replaced by stretchy joggers and roomy pajamas.
But the launch of the Covid vaccine has increased rapidly in recent weeks, with the US now averaging 2 million doses of vaccines a day. At the same time, the number of reported cases is decreasing. Encouraged by the positive trends, a wave of states has eased Covid restrictions, opening up the possibility for people to venture out to restaurants or a late-night movie. That means many Americans are going to search their closets for something new to wear.
It’s time for retailers to spin again. However, that will not be easy. Businesses continue to face congested ports in the US and container shortages, causing merchandise to pile up, making stocking fresh clothes on the shelves even more difficult. Management teams said shipping delays range from three to four weeks and are accompanied by higher transportation costs.
“Historic volumes, social distancing measures for workers, plus a shortage of drivers to transport goods in trucks, are causing congestion and significant delays in processing times,” said Wells Fargo analyst Ike Boruchow.
‘Sick of equality’
Department store chain Macy’s has said it has a plan to quickly restock work and formal wear, as its customers begin to resume their more normal activities. Many analysts are betting on a rapid change in buying behavior.
“People have money in their pockets, they are fed up with equality, and they will see an explosion of feel-good shopping,” said Stacey Widlitz, president of SW Retail Advisors. “The weather is changing and people are optimistic about going out again, or even sitting in the park in a dress.”
“The nature of human beings is that they want to feel good,” he added. “They want to feel fresh, especially for the younger generation. It’s the price of entry for getting back social.”
Retailers are already taking advantage of this message. Kohl’s website proclaims “The Great Refresh,” while Banana Republic touts a “Spring Awakening.” Men’s suit maker Suit Supply’s new ad campaign alluding to a “New Normal” went viral on social media this week.
Yet others are still hedging their bets, anticipating a continued push into loungewear and comfy clothing in 2021. Some consumers are likely to want to stick with a more casual wardrobe, one they have become accustomed to over the past 12 months. Businesses, in turn, may choose to relax office dress codes as their workforce returns.
Nordstrom is still marketing “Work from Anywhere Style” on its website home page. Rent the Runway maintains a section of its mobile app for “Home Entertainment” outfits.
Tweens and teens apparel retailer American Eagle said earlier this week that it expects its current quarter sales to be the strongest in three years, depending on the growth of its Aerie brand, which sells work-from-home options like trousers. yoga. sports bras, pajamas and lingerie.
Meanwhile, Kontoor Brands CEO Scott Baxter told CNBC that jeans are making a comeback, as Americans look for a way to dress, just a little more than they have been doing at home. Kontoor’s brands include the denim-focused Wrangler and Lee brands.
“Denim is casual, it’s easy … you can dress smart, you can dress casual,” Baxter said in an interview earlier in the week. “When people go back to the office, people think about how to dress, and denim seems to be the option.”
Logistics headaches persist
But retailers don’t have to worry about simply measuring the recovery in demand for clothing. They have had logistical headaches for much of the pandemic. And those don’t appear to be decreasing, making planning for the spring, summer, and back-to-school seasons even more difficult.
Nordstrom noted that shipping delays prevented some of its holiday merchandise from reaching shelves and warehouses on time, hurting its fourth-quarter results. It is still working to sell that inventory, the company told analysts earlier this week, and expects to return to normal inventory levels by the second quarter.
Gap also noted on Thursday, when it reported mixed fourth-quarter results, that port congestion is expected to continue through the first half of the year. That will result in elevated inventory levels in the second quarter, Gap said.
For Urban, the biggest issue at stake today is access to containers to ship goods, Chief Operating Officer Frank Conforti explained earlier in the week.
“While, yes, the ports are experiencing absolute congestion, especially on the west coast … and we are seeing delays of two to seven days at the ports, the biggest challenge is in the incoming vessels, which have enough containers in Asia to bring products, “said Conforti.
The limited availability of truck drivers to transport products from retailers across the country remains another problem, said Telsey Advisory Group CEO and research director Dana Telsey in an interview Thursday with CNBC’s Sara Eisen. .
Companies likely won’t sort their inventories to match buyer demand until back-to-school season approaches, he said. But, like Widlitz, Telsey doesn’t think that’s going to keep shoppers coming back to stores anytime soon for a new look.
“We have had no clothing expenses in over a year,” Telsey said. “I think [people] they want to renovate their wardrobes. “