Women's wear sluggish, but sales up 5.7% - in discount stores - Annual Industry Report, part 2

Discount Store News, July 18, 1988

Women's Wear Sluggish, But Sales Up 5.7%

In the face of a continuing sluggishness in women's apparel industrywide, discounters and off-price specialty chains will manage a respectable 5.7 percent sales volume increase this year, according to DSN research.

Total sales will hit $22.3 billion in this most important apparel category. Full-line discounters will see sales grow by a mere 1.9 percent to $16.1 billion; off-pricers will experience a 15.7 percent jump this year to $5.9 billion.

By not having to deal as directly with the highly volatile aspects of cutting-edge women's fashion, including the "great hemline debate," most discounters and off-pricers were not hurt as severely as the upper-end department and women's specialty stores.

Lack of One Fashion Look

However, discounters were affected by the distinct lack of any one fashion look or item to spur ladies' wear sales. The acid-washed denim jean, no longer a new item, is the last fashion product to stir any real excitement and drive the business.

Ladies' wear sales per store edged ahead by 0.9 percent to $1,965,000. General merchandise discounters enlarged their women's departments, going from an average of 10,000 square feet per to 11,000 square feet.

Because of the greater space, coupled with slower than normal sales growth, sales per square foot dropped by $18, or 9.2 percent, to $177 per square foot.

Turns slowed to 4.2 from 4.5, reflecting the lack of fashion excitement in the market. In addition, because of the need to react more quickly to style changes, ladies' wear manufacturers and retailers have been more reluctant--compared to their men's wear counterparts--to institute wholesale Quick Response programs.

Initial markup rose to 51.4 percent from 47.4 percent, and gross margin shrunk to 30.4 percent.

Upscaling of ladies' wear departments, at both full-line discounters and off-pricers, continued over the past year, along with the addition of higher-end brands.

One of the more important strategic moves of late among the top discounters was Wal-Mart's exclusive Bobbie Brooks woman's apparel deal.

Earlier this year Wal-Mart added the fashion women's wear brand, which represents a significant upscaling step. Carrying price points at the upper end of the chain's apparel price structure, Bobbie Brooks is, more or less, Wal-Mart's answer to K mart's Jaclyn Smith line, although the two can't be directly compared.

Wal-Mart, much more so than either K mart or Target, takes a more basic approach in women's wear. So the addition of Brooks, along with a trend--sparked in part by its Hypermart USA--toward getting more recognizable brand names in Wal-Mart stores, is a major step by the huge discounter.

K mart is increasing its commitment to the category, and to apparel in general, with its new prototype for its mid-size units. This features increased apparel space and places all apparel in the infield. Ladies' wear dominates the middle island, which is the most visible upon entering the stores.

Last year K mart also debuted two new ladies' wear private label programs, Weathered Blues, a denim-influenced sportswear collection, and The Body Company, a group of work-out/active wear.

The nation's No. 1 discounter recently kicked off another private label collection, called Beverly Hills Blues, an even more upscale woman's sportswear line.

Target also continues to emphasize image brands and labels. For example, it had No Excuses (advertised by once-famous Donna Rice) last summer in store when it was hot.

Petites and plus sizes, and maternity to a lesser degree, are among the few growth areas in the sluggish ladies' wear category these days.

Table : Ladies' Wear $22.3 Billion

PHOTO : Sales of apparel for juniors slowed during the second half of last year and business is still sluggish, with no hot fashion item to drive the category. Pictured is Apricot Bay private label at Ame's Meriden, Conn. unit.