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Survey Reveals Clothing Manufacturers Optimistic for Better Spring/Summer Sales

April 5, 2016

California Apparel News

By Deborah Belgum

Apparel and accessories manufacturers are optimistic that retailers will be having a good season in the upcoming months.

In a Capital Business Credit survey of 30 retail importers and manufacturers that supply approximately $800 million in goods to retail outlets in the United States, the vast majority said that 2016 will either be better or the same as 2015. Some 45 percent said the Spring/Summer seasons will be stronger than last year, and 39 percent thought it will remain the same.

“Nearly 90 percent of importers and suppliers are reporting reorders for the Spring/Summer shipping season,” said Andrew Tananbaum, CBC’s executive chairman. “Retailers have become increasingly reticent to stock shelves if they do not believe products will sell or consumers will buy. These reorders mean that the major retail chains and individual stores are optimistic.”

In the survey, 78 percent said that orders have increased or stayed the same. Of those who said orders had increased, one-third said they had risen while 29 percent said they had increased by more than 10 percent.

“Consumer confidence is increasing as a result of a more stabilized stock market,” said Louis Sulpizio, CBC’s senior vice president in Los Angeles. “In addition, with gas prices remaining low and household incomes increasing, consumers have a little bit more money in their pockets to spend.

“Additionally, retailers are developing multi-channel [bricks-and-mortar and web] strategies to ensure that consumers can buy what they want, when they want it. Finally, retailers continue to lure consumers in with discounts. While this may reduce margins, it generates needed foot traffic.”

Because the Chinese yuan has been devalued recently, half of the survey’s respondents said they are considering stepping up their Chinese production. One-third thought margins may increase due to the lower cost to produce goods in China while more than half believes cheaper goods will not translate into lower consumer prices.

Despite the optimism, there are words of caution. “We continue to counsel our importer and wholesaler clients to keep a keen eye on inventory to ensure that they aren’t undersold for the Fall season,” Sulpizio said. “We are seeing a new normal occur with respect to soft-goods orders. Retailers are delaying issuing purchase orders and are relying on their wholesale clients to begin producing goods without purchase orders. Ultimately, retailers are looking to create shorter seasons and are requiring quicker turnaround and delivery from wholesalers.”