As consumers purchase extra garments on-line, fewer retailers can win


0
As shoppers buy more clothes online, fewer retailers can win

A shopper looks through the clothes on her iPad device.

Source: 20/20

Shoppers didn’t go to stores to buy new clothes last year. They stayed home and surfed the internet for sweatpants and pajama sets. And because these new buying habits persist, few clothing retailers can gain market share, leading to continued store closures and bankruptcies.

According to an analysis published Thursday by Coresight Research, online apparel and footwear sales rose 27.2% to $ 121.5 billion in 2020. The total market for clothing and shoes in the USA shrank by around 12.1%, as Americans bought fewer items for their wardrobes during the Covid pandemic.

Coresight predicts that online apparel and footwear sales will either remain unchanged or grow in the low single digits in 2021 as the overall apparel market rebounds slightly, increasing by around 7%. The growth is being driven in part by people returning to stores, if not at pre-crisis levels. Deborah Weinswig, Managing Director of Coresight, said she expected many consumers to maintain their new online shopping habits.

Coresight calls for mid-single-digit online growth for the clothing category in 2022 and 2023.

Online apparel and footwear sales accounted for 37.4% of total spend in this category last year, up from just over a quarter in 2019, Coresight said.

Coresight warned of its outlook “remains highly uncertain as vaccine rollouts aim to offset the grave health crisis and significant uncertainties about how to maintain recent consumer habits.”

“We assume that the health crisis will weaken by 2021 and that the return to more regular ways of living, working and spending will mostly take place in the second half of the year and by 2022,” said Weinswig.

A fast answer

A number of clothing retailers, including American Eagle Outfitters, Foot Locker, Gap and Nike, already do more than 30% of their business online, while Dick’s Sporting Goods, Levi’s and VF Corp. just below that threshold, said Coresight.

American Eagle was quick to invest in its online business in the early days of the pandemic to respond to rising sales, American Eagle’s business communications manager Taryn Racin said during a virtual presentation Wednesday at the National Retail Federation’s annual Big Show.

“We’ve accelerated our online shopping, in-store deliveries, and our roadside platforms to ensure we can meet our customers’ needs … and use our stores as small, mini-distribution centers,” she said. “And that will continue.”

Department store chain Nordstrom announced Wednesday that its digital store accounted for 54% of total sales in the nine-week period ending Jan. 3, compared to 34% a year ago. Overall, vacation net sales decreased 22% from 2019, while digital sales increased 23%.

Clothing brands on the verge

The clothing retailers who haven’t been able to keep up online often have the biggest problems. In 2020, more than three dozen retailers filed for bankruptcy, including a number of apparel brands: True Religion, Ann Taylor-mother Ascena Retail Group, Tailored Brands, and New York & Co.-mother RTW Retailwinds.

Christopher & Banks, a Minneapolis-based clothing chain targeting women over 40, announced Thursday that it has filed for bankruptcy and plans to close much, if not all, of its stores.

Another clothing name found more luck this week. Express announced Thursday that it has signed a definitive loan agreement with private equity firm Sycamore Partners, Wells Fargo and Bank of America Merrill Lynch, to add $ 140 million to liquidity and help tackle the pandemic. The company, which caters to men and women looking for work clothes, has struggled to connect with customers over the past year. During the third fiscal quarter, net sales decreased 34% year over year to $ 322 million.

– CNBC’s Nate Rattner contributed to this data visualization.


Like it? Share with your friends!

0
fun

0 Comments

Your email address will not be published. Required fields are marked *