US retailers anticipate sharp drops in apparel and footwear sales, indicating potential decline after recent positive retail sales data.
Retail purchases rose 0.3 per cent in June, following a 0.4 per cent increase in April, according to Commerce Department data released on 15th June. However, the outlook for the upcoming year appears less optimistic.
A major brand partner has reported a significant decline in retailer demand for their planned merchandise in spring and summer 2024.
The decline in apparel orders strengthens the belief that a US economic recession is becoming more probable, especially with the Federal Reserve’s readiness to raise interest rates once more.
Apparel imports experienced a sharp 31 per cent decline in the first four months of this year compared to the same period last year, as per US government trade data.
“The apparel market is displaying clear signs of anxiety,” commented Sheng Lu, an associate professor of apparel studies at the University of Delaware.
The decline in imports and orders reveals retailers’ worries about the waning spending trend and their focus on reducing inventory from 2022 amid supply chain challenges, ahead of the crucial back-to-school and holiday seasons.
The latest available data from S&P Global Market Intelligence shows that employment in California’s apparel production sector experienced a 4.6 per cent decline in April, exacerbating a downward trend that started in October 2022.
