Friday, February 6, 2009

Is trading down to cheaper clothes a good strategy in a recession? yes and no

The Associate Press reports the results of a report by the International Council of Shopping Centers-Goldman Sachs that suggests that people have not reduced their clothing spending by as much as expected, and seem to instead be "trading down", buying cheaper clothing, not less clothing. Here's the part that caught my eye:

Life isn't too rosy for the nation's apparel retailers. On average,
sales at nearly a dozen apparel companies fell 12.1 percent in January.
Hardest hit was Gap Inc., which saw same-store sales plummet 23
percent. At the San Francisco-based chain's Old Navy stores, comparable
sales fell 34 percent. Sales fell 16 percent at women's clothing chain
Cache Inc.

The month was grim for teen- and youth-oriented chains
and department stores, too. Abercrombie & Fitch Co. said sales
skidded 20 percent, although the figure wasn't as bad as experts had
expected. Conversely, analysts expected sales would dip just 2 percent
at Children Place Retail Stores Inc., thanks to parents who were
expected to continue to buy clothing for their kids, even if they
wouldn't buy for themselves.

Experts were wrong. Sales there fell 11 percent.

It appears that consumers are buying their kids' clothes at discount stores or sale prices. This makes good sense, considering that children outgrow their clothes faster than they wear them out. Before today's strongly gendered styles, expensive clothing such as winter coats could be purchased in tailored styles and neutral colors and handed down to several children. (Boomer readers may remember a double-breasted navy wool coat worn by several siblings, male and female.)

For their own clothing, adult shoppers are buying less and being pickier, which is a different strategy, but just as smart. I've seen scads of last year's fashion darlings on the clearance racks (I'm looking at you, cropped jacket with the 2" buttons) and no price would be low enough to tempt me. I have bought two fleece turtlenecks (new, on sale), a cashmere polo (thrift store), a pair of snow boots (discount outlet) and some replacement socks and undies. That's going to be it for my new winter items, and I'm fine with that. Sorry, Macy's.

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