Sick and Tired of Being Sick and Tired
August 10, 2009,
Everybody who predicted a loooong climb out from the bottom seems to have been right.
We wince when we see some of the numbers coming out of formerly hard-charging merchandising machines like Kohl's, which just barely eked out a sales increase in July — up 0.4%. Then Kohl's raises its earnings guidance for the second quarter — and on the same day Ross Stores says its second-quarter earnings are going to beat Wall Street's consensus forecast, and Jo-Ann Stores reports a 4.1% sales gain for the quarter — and you have to wonder if things aren't starting to sputter to life.
By the way, remember when a 4.1% uptick in sales seemed like a fairly lackluster performance?
The dollar stores — at one time referred to as extreme value retailers — have been having a fairly good season throughout the recession, and that's good and I'm happy for them. I'll start feeling better about things if Kohl's keeps beating its numbers and JCPenney begins to do the same. The day that Target's marketing campaign no longer has to scream "Trust us! Our prices are cheap!" will be a good day for everybody.
When this recession started, a lot of textiles execs said they didn't expect to see anything like normal business come back until the back half of 2010. Some skeptics didn't expect the business to turn until early 2011. But we turn to the business channels today and hear commentators raising the question of whether things are coming back a little earlier than expected.
Retail has already locked in to promotions and price cutting for at least the next 8 to 10 months. At market next month I expect to see boatloads merchandise for sensitive price points.
It is completely understandable, but I also worry that the industry is turning itself into a lagging indicator in the process.
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See the August 2017 issue of Home & Textiles Today. In this issue, we look at the Top 50 Retailing Giants Report, plus Manufacturing: Made in the USA gaining ground; International: Portugal ramping up exports; New products: NY Now home textiles introductions; Outlook: Commentary from H&TT's editors; and Planning: Trade show calendar.