Apparel Sales Lead the Way in Holiday Retail Rebound

by Doug Desjardins

After two consecutive holiday seasons of dismal sales, the apparel category has rebounded this year in a big way for retailers.

Department store chains and apparel retailers who watched their business disappear or migrate to low-priced mass merchants in 2008 and 2009 have seen that business return just in time for Christmas. According to MasterCard Spending Pulse, apparel sales increased 9.6 percent in November, far better than the overall sales increase of 6 percent.

“Household wallets are pointing a little more toward (apparel) retail,” said Michael McNamara, MasterCard’s vice president of research and analysis.

The most surprising gains came in men’s apparel, where sales increased 7.2 percent in November after declining in October. Sales of women’s apparel jumped 3.9 percent and increased for the second consecutive month. That increase is an even more welcome sign for retailers, since women account for the bulk of apparel sales and have cut back sharply on spending since 2008.

Those gains were reflected in November sales reported by some of the nation’s largest department store chains and specialty retailers. Leading the way was upscale retailer Abercrombie & Fitch, which reported a 22-percent increase in sales followed by Limited Brands with a 10-percent increase. Department-store chain JC Penney reported a 9.2-percent jump in November sales, followed by Saks with a 5.3-percent increase and Nordstrom’s with a 5.1-percent jump.

Online sales of apparel posted even larger gains in November. MasterCard estimates apparel sales increased 22 percent online in November, the largest increase in 2010 and the 12th consecutive month apparel posted a double-digit increase in sales online. Children’s apparel led the way with a 33-percent increase followed by footwear with 32.7-percent jump.

Online apparel retailers should also benefit from Free Shipping Day Dec. 17, a day that’s typically the last big online shopping day before Christmas for shoppers who want to ensure that shipments arrive by Christmas Eve. Participants this year include Macy’s, Sears and American Eagle Outfitters.

“Retailers know their shoppers look for convenience and great prices and are especially motivated by free shipping offers this time of year,” said Joan Broughton, interim executive director of shop.org, a division of the National Retail Federation. “As shipping deadlines approach, online retailers will highlight extra incentives for free shipping and other savings to nudge along holiday procrastinators.”

Retailers have also launched new online promotions to help consumers shop for clothes. JC Penney launched its "Know Before You Go” online feature this fall, which allows consumers to enter their size and color preference for any apparel item along with their zip code to check on availability at any JC Penney store within 50 miles.

Resources

Strong Start to Holiday Fueled by Apparel Sales

Retail Sales Jump 6% in November

This Whole Consumer Surge is Built on Demand for Clothes

Thousands of Online Retailers to Offer Free Shipping this Friday

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