Apparel Sector Predicts 3% to 5% Growth for 2013 Back-to-School Season
July 16, 2013
Importers and manufacturers who sell to America’s major retailers are seeing growth in sales for both the summer and back-to-school seasons, according to Capital Business Credit (CBC), a non-bank lender that services the retail sector.
According to the quarterly Global Retail Manufacturers and Importers Survey, 46 percent of wholesalers indicated that they are receiving increases in orders from retailers for the back-to-school season compared to last year. Of the wholesalers experiencing growth, one third said that orders are increasing by 3 to 5 percent, and a quarter said they are seeing increases of 6 to 8 percent.
Beyond seeing individual increases in orders from major retailers, more than half of manufacturers and importers surveyed believe that the back-to-school/fall retail season will be stronger than last year. When asked the same question in 2012, only a third of respondents believed that they would see growth year-over-year. When it comes to estimating how much stronger 2013 will be, the majority (46 percent) believe that it will be between 3 and 5 percent stronger. A quarter of respondents believe that the season could improve by as much as 10 percent.
“It paints a positive picture for the retail sector that not only are importers and manufacturers experiencing individual growth, but they believe the overall retail sector is also continuing to get stronger,” said Andrew Tananbaum, executive chairman, CBC. “At CBC, we believe that small gains are the ‘new normal’ when it comes to retail sales growth. As long as the economy continues to move forward and interest rates do not skyrocket, we can continue to see this type of momentum moving forward.”
It is not just the back-to-school season that is experiencing growth. Respondents also indicated that they experienced increases in summer orders and believe that the summer season will be healthier overall. This is in direct contrast with their outlook a year ago when asked about the 2012 summer season.
Forty-one percent of respondents believe that the 2013 summer season will be better than last year. In 2012, only 24 percent believe that the 2012 summer season would experience growth. Of those who believe that the summer of 2013 will be stronger, a third (36 percent) believe the sector could see gains of 10 percent or more and a third (32 percent) believe that it will be between 6 and 10 percent stronger.
When it comes to individual orders, nearly half (48 percent) of respondents indicated that they experienced an uptick in summer orders overall, and 58 percent said that retailers placed re-orders for summer merchandise. This is strikingly different than the summer of 2012 when only 28 percent of respondents indicated that they experienced an uptick in orders from the previous year (2011).
“With a late start to summer from a weather perspective, there is a lot of speculation on how the summer season will perform,” said Tananbaum. “Based on the survey results and feedback from our customers, we believe that summer will not be gangbusters for retailers but that moderate gains can be expected.”
Established in 1988, Capital Business Credit is a commercial finance company specializing in providing creative supply chain financing solutions.