Shoppers Cut Clothing Purchases, Forcing U.S. Retailers to Cut Prices, Marketing & Advertising News, ET BrandEquity

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Inflation-weary shoppers are drastically cutting back on clothing purchases, prompting U.S. retailers to slash prices to clear inventory from shelves.

Earlier this month, executives at US giants Walmart and Target were forced to offer deep discounts and rollbacks on clothing to empty shelves.

This week, Victoria’s Secret, Urban Outfitters and Kohl’s said in conference calls with analysts that shoppers are buying only certain types of clothing. While the companies didn’t give specific product examples, this is the trend they’re seeing: Shoppers are ready to open their wallets for a two-for-$52 deal on bras at Victoria’s Secret. , but a $52.95 pair of joggers at PINK may be just too much.

All eyes are on Gap Inc, which reports quarterly results after the market closes Thursday.

Urban Outfitters and Victoria’s Secret said they saw brands designed for younger audiences decline in sales. Victoria’s Secret’s PINK line, which targets teenage girls and young women, saw tight clothing sales in the second quarter compared to the Victoria’s underwear and sleepwear brand.

“We will be very cautious about our ‘apparel’ purchases for the second half of the year,” Victoria’s Secret chief executive Martin Waters said during the company’s earnings call on Thursday.

Young, less affluent shoppers at Urban Outfitters refrained from buying full-price items and waited “for promotions before buying,” Urban CEO Richard Hayne said Tuesday.

Kohl’s said juniors’ clothing saw sales decline in the second quarter because designs were “too trendy, not enough basics,” although women’s clothing outperformed other categories.

“Some of the fashion choices were a bit too youthful, I would say. That’s been fixed,” Kohl CEO Michelle Gass said in a conference call Tuesday. “I would say one of the things that hurt us is that with all (the) supply chain disruptions that have happened, we haven’t been able to get in and out of some of these items.”

Walmart and Target have dealt with similar issues. Both retailers have struggled to unload apparel goods that arrived a few seasons late, which they are trying to reduce by aggressively cutting prices. One bright spot, however, was fashionable womenswear, Target said last week, where it saw “significant growth.”

Jessica Ramirez, senior research analyst at Jane Hali and Associates, said she noticed steep discounts on brands Gap and Old Navy, while upscale brand Banana Republic, which sells dressy office wear, managed to sell off more clothes at regular prices. prices.

Demand for formal wear and workwear was strong at Macy’s and Kohl’s, the companies said.

At Kohl’s, “high casual” styles for women and men, including dresses and office wear, outperformed as more people returned to work, he said. Kohl’s has invested in dressy styles from brands such as Simply Vera, Lauren Conrad and Nine West, for customers who work more often in offices, although it is also planning clearance events to help remove unwanted items from shelves .

Macy’s CEO Jeffrey Gennette said on the company’s earnings call on Tuesday that second-hand men’s and women’s clothing are “very healthy categories,” the average selling price of workwear for men’s and “missy carrier” increasing 29% and 20%, respectively, over categories with heavy promotions due to excess inventory.

Young people under the age of 25 – widely known as Gen Z – love to place multiple super-fast fashion orders, which then arrive in the mail.

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