Show Apparel Sales Outlook Bri Brighter The slowdown in consumer spending has wrought havoc on sales and earnings of apparel retailers IN FACT operations and profitability in this segment of the economy have been disappointing disappointing disappointing dis dis- dis- dis appointing during the latter part of 1969 and through most of 1970 Owing to the concept of total merchandising however however however how how- ever some retail outlets have not suffered severely because turnover of general merchandise merchandise merchandise dise has offset the decline in demand for clothing THERE HAS S been tough sledding for lor the entire apparel apparel apparel ap ap- ap- ap parel industry Part of the problem arose from the sharply negative response to the radical plunge of hemlines hemlines hemlines hem hem- lines in women's outerwear This has been in marked contrast to the previous enthusiastic enthusiastic enthusiastic en en- reception of the mini miniskirts While the fight raged over the mini-midi-maxi mini designs demand for women's apparel waned noticeably UNCERTAINTY as to the ruling fashion and lack of a favorable reaction to both the midi and the maxi prompted cautious buying on the part of both consumers and retailers More recently there has been a considerable swing toward pant suits and separates While demand for clothing has been a victim of these drastic fashion changes for more than a year this has been far from the whole story of the difficulties ties in retailing THE VOLUME of total retail retail retail re re- tail trade has actually been languishing for the past two years For example sales of oC home furnishings furniture a p- p and TV sets have lagged due to the low level of home building MONTHLY retail sales fig- fig t d dhave dhave dhave d d- ures-seasonally ures u s e have held in a peak range during during during dur dur- ing this period but the trend has been sidewise and not higher It has been price hikes not unit gains which have kept dollar sales volume at a high level ON THE basis of a constant dollar indications are that the physical volume of retail trade has been losing ground There are many reasons Corthe for Cor forthe forthe the lack of vitality in consumer consumer consumer con con- sumer spending at a time when a rapidly growing population population population pop pop- and a strong in in personal income should be behaving behaving having an optimistic effect For one thing the Vietnam war and tensions dampen confidence MOREOVER demonstrations and other social disruptions disruptions disruptions dis dis- dis- dis keep many women from shopping as often as usual And there has been definite resistance to soaring prices Other developments making consumers less eager to buy Gloomy business and employment employment employment employ employ- ment outlook over the past year the weakness in the securities markets for two years and the relentless climb in various tax levies As a result there has been an increasing increasing increasing in in- creasing emphasis on saving THERE ARE two favorable effects on the up step-up in the rate of consumer savings First the moderation i n spending has helped prevent a more critical inflation binge Second the savings build up puts consumers in a better position to spend now that the economy is in need of oC assistance assist assist- ance DESPITE THE TIlE drap performance performance performance per per- of the past year apparel sales can still close closeout closeout closeout out 1970 on a strong note Prospects for 1971 are even more promising There should be some improvement in sales and stringent cut cost ting programs of oC apparel retailers retailers retailers re re- re- re should d help counter inflated inflated inflated in in- operating op expenditures With women making up a larger share of the work workforce workforce workforce force there is a a growing market for clothing of all types CURRENTLY the Research Staff of Babson's Reports favors purchase of the common common common com com- mon stock of Franklin Stores for participation in the apparel apparel apparel ap ap- ap- ap parel retailing for field investors investors investors in in- seeking capital appreciation appreciation appreciation ap ap- by way o 0 of f a thoroughly deflated issue |