Tags: retail | sales | specialty apparel | warm winter

CNBC: Toasty Holiday Weather Seen as $500 Million Hit to Specialty Apparel Retailers

CNBC: Toasty Holiday Weather Seen as $500 Million Hit to Specialty Apparel Retailers

By    |   Wednesday, 30 December 2015 09:09 PM


This holiday season’s uncharacteristically warm weather reportedly has taken a $500 million chunk out of the projected sales of specialty apparel retailers.

And there are more weather woes on the horizon for retailers: an unusually cool spring is forecast, which reportedly could cause more harm than the sultry December.

"Winter is coming," Scott Bernhardt, president of Planalytics, a consulting firm that analyzes the effect of weather on consumer demand, told CNBC. "But it's not going to be enough to make up for missing the holiday season."

According to Planalytics, specialty apparel stores lost $421 million in sales due to weather between Nov. 1 and Dec. 19. That number ballooned to more than $500 million through Dec. 26 — and it doesn't even account for the losses at department stores, CNBC reported.

Demand for outerwear declined 10 percent nationally in December from last year, while demand for boots and hats, gloves and scarves each fell 4 percent, CNBC reported.

Many states in the eastern two-thirds of the U.S. — including New York, Philadelphia and Washington, D.C. — are on track to post record or near-record high temperatures for November and December, CNBC reported.

Bernhardt told CNBC that retailers will have no choice but to continue slashing prices on their winter goods, or sell the items to off-price stores such as TJX for "pennies on the dollar."

If they were to have severely discounted winter merchandise on their shelves when spring shipments arrive in late February, it would be nearly impossible to sell their new products at full price. "They'll be practically giving it away, but they'll clear it," Bernhardt said. "The level of markdown that you're going to see … we haven't seen that in a very long time."

Meanwhile, general retail sales from Black Friday to Christmas Eve rose 7.9% compared with last year, according to a survey from MasterCard SpendingPulse.

The results, based on MasterCard spending activity and estimates of cash and check spending, did not include dollar amounts for the holiday season. E-commerce was the biggest winner, growing about 20% over last year, the survey said.

Sarah Quinlan, senior vice president of market insights for MasterCard Advisors, said there were signs that shoppers were eager to spend, including double-digit growth in furniture sales. That shows "consumers are willing and able to splurge on big-ticket items," she said in a statement.

Minneapolis-based Target reported several "record-breaking days" on Target.com, spokeswoman Megan Boyd told the StarTribune.  Although the company couldn't offer specific sales data, toys remained a perennial favorite and consumers showed "great interest" in the Apple Watch, iPads and gaming consoles both in stores and online.

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This holiday season's uncharacteristically warm weather reportedly has taken a $500 million chunk out of the projected sales of specialty apparel retailers.
retail, sales, specialty apparel, warm winter
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2015-09-30
Wednesday, 30 December 2015 09:09 PM
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