Edited by Robin Goldwyn Blumenthal
THE COMPETITION FOR TEEN DOLLARS during the back-to-school season is always fierce, but this year it could get tougher -- in particular for specialty-apparel retailers.
Consumer spending on clothing and accessories is expected to be flat with the year-earlier total, $231, according to the National Retail Federation.
"It seems like things have stalled," says Dana Telsey, head of Telsey Advisory Group, who is conducting an 11-city tour of retailers during the back-to-school season. Her early product, price and presentation rankings are so far slightly lower than last year's. That could result in August same-store sales below the previous year's -- which were 4% higher than 2005's.
There's been more than a tripling in the number of teen stores, mostly at malls, since January 1999, says Bob Buchanan, a retailing analyst at A.G. Edwards. He notes that while growth in the teen-population demographic has been historically strong, it's expected to be negative for the 10 years through 2015.
While baby-doll tops, layering and dresses are expected to be big fashion choices for fall, Buchanan points out that they are "variations on a theme" of items that have already debuted.
The expected retail softness comes amid concern over gas prices, housing and the subprime-mortgage mess, and at a time when Telsey expects that competition from department stores, particularly Kohl's /zigman2/quotes/210414114/composite KSS -2.89% , J.C. Penney and Bloomingdale's, a unit of Macy's /zigman2/quotes/201854387/composite M -3.24% , will heat up for the $7.6 billion of apparel-and-accessories spending dollars. Who else might benefit? TJX /zigman2/quotes/203136811/composite TJX -1.57% and Target /zigman2/quotes/207799045/composite TGT -2.56% .
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Markets in Canada are closed.
BMC Software reports first-quarter results after the market closes.
The Fed's policy-making committee meets, and is expected to hold the Fed-funds target rate at 5.25%. Attention will be paid to whether any mention of the subprime and credit market turmoil is made in the statement. Lehman Brothers sees only a modest acknowledgment of market developments, with the growth and inflation outlook about unchanged.