With back-to-school season almost upon us, it wasn’t good news today, August 5th, to hear that latest round of financial reports for July indicated sluggish growth overall for apparel retailer at only 2.9%. In particular, according The New York Times and Reuters, retailers catering to teens did particularly badly with increase around 1.5% compared to large discount stores with 3.9% increases in sales.
The greatest blame in sales isn’t necessarily bad styles, but lack of consumer confidence in spending on apparel (see also our Summer Youth Culture Study 2010 for details, charts, trends on changes in spending patterns among youth culture). Stores such as Hot Topic (down 9%), Wet Seal, and Buckle have all reported decreases in sales in July compared to a year ago -which was a bad year also. Aeropostale sales only increased 1% missing, it’s estimates of 7.1%. Even Target, and their launch of the Shaun White collection, was off for the month.
JC Penney’s reported significant “unexpected” same store sales decreases, however stores that did better include Macy’s which was up 7.3% due in part to ramping up their high-end, exclusive lines which have higher margins.
Volcom, however, did do well in its second quarter overall with total consolidated revenues at $62.5 million, compared with $54.2 million in the second quarter of 2009. Where Volcom took a hit was in Europe with Total revenues in the company’s Europe segment at $5.1 million, compared with $5.9 million in the same period in 2009. Total revenues in the company’s Electric segment were $6.6 million, compared with $4.7 million in 2009.
“On a consolidated basis, our business in the second quarter was right in line with our plan,” said Richard Woolcott, Volcom’s chairman and chief executive officer. “The strength of the Volcom and Electric brands is clearly evident, and there is good momentum underway. Our teams are working hard to maximize every opportunity and align the company to continue to gain market share. I am very pleased with Volcom’s current position and believe we are on track to achieve our short and long term goals.”
From the Material Girl collection.
In other retailer news, Madonna’s fashion collection Material Girl launched at Macy’s yesterday, causing a frenzy at the NYC stores with scores of ’80s Madonna’s lined-up to see the new collection. Lourdes, of course, loves her mom’s 80’s inspiration and is the lead blogger for the collection.
Mark Ecko, after selling a majority stake to Iconix Brand last fall, has restructured and signed new licenses with Iconix with a newsworthy comeback plan.
Other success stories however for this quarter include Swatch which posted a recorded first half with 54.4% increase riding the wave a watches becoming in serious vogue now, and Adidas which raised it’s profit forecast for 2010 due in part to their successful campaigns with the World Cup and Reebok’s “Re %u2013Classic” making effective waves in it’s comeback.
Finally, the heritage boot brand Red Wing has again gotten a boost from fans in Japan for the brand, with 2ND, a Japanese publisher creating “The Red Wing Book” volume 1 tracing the history of the brands heritage and rise in popularity especially in Japan. Unfortunately the text is all in Japanese, but the pictures are quite beautiful. It’s the kind of devoted fandom that many such brands wish for.