Get ready for a weak holiday seasonBy Toni Whitt
October 6, 2008
The coming Christmas season -- combined with this year's tepid back-to-school shopping -- is expected to mark a long-term retreat by consumers to less extravagant spending.
Analysts believe the precipitous downturn in the housing market that has led to a loss in home values, and the subsequent credit crisis has jolted consumers into the realization that they cannot keep spending beyond their means.
That is likely to mean one of the weakest Christmas shopping seasons in decades. Whatever rise in sales, if any, will likely be driven by inflation, even the more optimistic industry watchers say. ...
Stores are already preparing for a soft season by cutting back inventory and carefully planning out their sales programs.Kohl's Department Stores, Talbots Inc., Bon Ton Stores and J.Crew Group Inc. all are cutting back inventory going into the holiday season. ...
J.Crew is "planning very conservatively" for Christmas, said Millard Drexler, the company's chairman and chief executive. Consumers have become accustomed to waiting for the deep discounts in the two weeks before Christmas, he warned. "December has become the biggest promotional month in the world, and no one can forget that," Drexler said. "Please, let's not own a mark-down inventory Dec. 22."
But based on the back-to-school season, it is going to take a lot to get consumers to open their wallets much this holiday season regardless of mark-downs, said retail analyst Britt Beemer, the founder of America's Research Group who correctly predicted last year's dismal holiday season.
This article does not paint a positive portrait for retail sales this holiday season, although it is not unexpected. I am curious how J.Crew will fare considering it is still facing some issues with its inventory/system.
What are your thoughts on the article? Disagree or agree with any of the points made? Do you think you will (or already have) curbed your spending with J.Crew due to the economy?
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