The once-booming apparel and accessories business in the United States has suffered a knock. Needless to say, the garment business, like many others, is struggling as rising costs cause individuals to spend more cautiously. As a result, garment sales have been declining in recent months.
Apparel retailers, too, are feeling the heat and are going all out to boost sales through a variety of initiatives. Retailers have begun to announce third-quarter results, and the majority of clothing companies have reported poor results. They are optimistic about the forthcoming Labor Day, when they expect sales to increase.
Apparel Sales Declining
According to the most recent National Retail Federation (“NRF”) data, clothes and clothing accessory sales fell 0.6% month over month in July. However, it increased by 0.2% year over year. This comes after retail sales remained steady in July after improving in each of the previous six months. In July, online and other non-store sales climbed 2.7% month over month and 18.1% year over year.
In the face of ongoing inflationary pressures, the retail sector has put up a valiant performance. People continued to spend despite rising prices, driving sales. The same was true for the apparel industry. After the economy began to improve, apparel manufacturers did well. When individuals started taking holidays, sales skyrocketed.
Retailers Scramble to Drive Sales
A number of clothes retailers have reported dismal quarterly results, with the majority blaming a drop in sales for the revenue drop. Several of them are now devising deals and discounts to stimulate sales, since it has becoming increasingly difficult for them to clear the shelves. The Gap, Inc. (GPS Quick QuoteGPS – Free Report) revealed last week that sales fell 8% year over year in the most recent quarter. GAP stated that it is now aggressively reducing inventory and rearranging its assortments in order to attract shoppers. Gap is ranked third by Zacks (Hold). The complete list of today’s Zacks #1 Rank (Strong Buy) stocks can be found here.
Target Corporation (TGT Quick Quote) is another retailer. TGT – Free Report) and Walmart, Inc. (WMT – Free Report) have also announced significant clothing discounts. TGT and WMT are also offering clothes discounts. Target, like The Gap, stated that a huge drop in garment sales was one of the causes for their revenue decline in the most recent quarter.