US retail starts to perk up

Thursday 16th of February 2012 05:09:06 PM

While Abercrombie & Fitch had a flat fourth quarter of 2011, the US clothing retailer is anticipating improving margins in 2012, as a result of reduced raw material costs and also as the outcome of an intensive overseas penetration strategy that has brought the trademark shopping experience, including topless male doorkeepers, to Europe, much to the consternation of some, who consider the ‘experience’ to be the equivalent of soft porn.

Regardless of such concerns, the share price dropped a little on the announcement of reduced net income in 2011 but has begun to chart upwardly again with good January figure and on the expectation that spring lines will succeed where winter ones failed as a result of unseasonably warm weather during the peak buying period which held back consumer investment in high cost items like winter coats and snow boots.

More widely across the USA, a swift trade in gift cards and vouchers, which consumers appear to be redeeming as rapidly as they can, along with warm weather during late January, has given a boost to retail sales.

The National Retail Federation reports that “…retailers are still riding the tailwinds of consumers’ spending power…” leading to sustained growth from the January sales through to month end.

The US Department of Commerce sales data for January 2012 highlights an overall retail sales percentage increase of 5.6% (unadjusted) and within the overall figures a flat position for clothing retail compared to the previous month but a 3.4% unadjusted increase over the same period in the previous year. Amrita Malik

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