USA Retail Chains Selling Clothing Looking at Dismal Sales

Thursday 16th of October 2008 05:32:43 AM

USA Retail Chains Selling Clothing Looking at Dismal Sales

The USA is experiencing severe economic problems which are naturally dragging down clothing retail sales. For example, Gap, Inc. reported a 6% decline in sales in September. Sales dropped from $1.43 billion to $1.34 billion when comparing August and September 2008. But 6% is a small decrease compared to the 24% reduction reported by the Banana Republic clothing company.

Also reporting significant sales declines was Abercrombie & Fitch. The company reported a 7% drop in sales in September. Then there was Limited Brands reporting a 6% drop in September sales. One clothing retailer after another has reported a drop in sales due to the problems in the economy.

When the economy experiences trouble, consumers naturally begin to cut back on household expenses. One of the first areas reduced is clothing. Only necessary clothing and clothing which can be purchased at reduced prices, such as t-shirts, continue to do well in terms of sales. In addition, some of the giant discount store chains such as Wal-Mart continue to do well though they are also seeing a sales decline of modest proportions when compared to projections.

Mike Jeffries is the CEO and President of Abercrombie & Fitch. When asked about the lower company sales he said this is an “extraordinary macroecological emergency situation”. He then predicted that sales for the second half of 2008 would be much lower than budgeted. When reading between the lines, this statement portends poor holiday sales.

But even as storefront sales decline, many companies selling on the internet continue to do well. Consumers search for bargains on the internet as a way to reduce expenses without giving up necessities. The internet is a bargain hunter’s paradise. The economic situation in the USA and Europe is not expected to begin improving until the middle of next year as a global recession impacts all industry sectors.

(c ) Image by Roberto Tostes, www.sxc.hu/