Wednesday, January 14, 2009

Buying Clothes is Out - Making them is In

Guess I got the three elements of Maslow’s hierarchy out of order. Instead of shelter, this installation is about clothing – food, then clothing, and shelter is last, I’m told. So, Part 1 was about food. This is Part 2 – and I’m talking clothing.

This holiday was one of the toughest ever. Apparel retailing is awash in red ink. The biggest losers overall were high-end stores – Saks and Neiman Marcus saw the biggest declines, but sales slumped at all department stores - and Womens' Wear Daily reported this week that "an epidemic of closings and downsizing has hit high-profile specialty boutiques." Most clothing retailers are down. Even Wal-Mart, who did well in other categories, saw declines in apparel.

Although parents reported they planned to cut spending on themselves before they would cut spending on their kids this holiday, teen brands got hammered in Q4. This may be the clearest indication of the power of teen demand – in good times, they have allowances and part time jobs that put cash in their pockets. In the second half, jobs were harder to come by, gas was more expensive, and allowances may have tightened along with family budgets. Not coincidentally, Abercrombie, PacSun, American Eagle were all big losers this holiday.

Thanks to Project Runway, interest in sewing is booming. The owner of Cutting Line Designs pattern company told the Minneapolis-St. Paul Star Tribune in March last year “"Without a doubt, 'Project Runway' has been a shot in the arm. The audience watches the contestants sewing, and suddenly everyone wants to sew."

The sewing business represents over half of Jo-Ann Stores’ sales and while the rest of the market swooned in Q3, Jo-Ann’s sewing-related sales grew over 1% on a same-store-sales basis. As with home improvement, the influx of newbies into the market means increased interest in sewing classes, too. On in October, Liz Keptner reported that “that sewing class that lots of us suffered through in high school is now the latest trend in hand-made crafts.“

I haven't seen anyone link the DIY clothing trend to the drop in apparel store sales directly. But it could further fuel the move away from pretention and conspicuous consumption.

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