Apparel Retailers

With few exceptions, specialty store apparel retailers are going through another tough year. The “why” is no surprise: “The largest shares of female shoppers are engaging in ways to limit spending” on apparel, shoes and accessories, says Kelly Tackett, senior consultant with Columbus, Ohio-based market research firm Retail Forward. “Many women also are shifting to less expensive brands, styles and fabrics and changing how and where they shop.”

Retail Forward’s ShopperScan survey found that nearly half (46 percent) of consumers are “shopping retailers across the soft goods sector less often than a year ago.”

A glance at the apparel Power Players confirms these findings: Gap sales were down 7.8 percent; Limited — which still sells more apparel than H&BC — was off 10.8 percent. There are exceptions to this gloomy scenario, including off-pricer Ross Stores, where sales rose 8.6 percent last year, and Aéropostale, Forever 21 and Urban Outfitters remain destinations where 18- to 25-year-old shoppers spend like they can’t spell recession.

“It’s clear that where there is exciting merchandise, there is outperformance on a relative basis,” says Howard Tubin, an analyst with RBC Capital Markets. “We can’t stress enough the importance of offering new or improving fashion to customers in the current environment.”

Forever 21, a newcomer to the Power Player ranks, has grown tenfold in just eight years. Its stores average 10,000 to 20,000 sq. ft., though some are boutique-sized and one soon to open in Times Square is 90,000 sq. ft. Larger appears to be the format of the future, since the company acquired 21 former Mervyns locations averaging 80,000 sq. ft. and is looking for more.