Americans ready to repair wardrobe, but shipping sniffs could affect retailers

Some of us say “so much” to sweat pants.

In the last week of February, seven of the top 10 items sold on the Anthropologie website were dresses, the company, a unit of Urban Outfitters, said this week during a earnings conference call. Until then, it was said, it was lucky to see only one or two dresses entering the top-10.

Richard Hayne, CEO of Urban Outfitters, called the change a striking and very positive one.

“Until recently, fashion was predominantly … casual and comfortable at home,” Hayne said. “We’re starting to see – what I call ‘fashion’ is starting to catch on. The clothing business will have a change in terms of the categories we sell. ”

Clothing sales fell 19 percent last year, according to market researcher The NPD Group, as Americans stayed home and focused on food and other essential household products.

When shoppers bought clothes, comfort was the issue: sweatpants sales rose 17 percent year-over-year and sleepwear rose 6 percent, NPD said. In the field of fashion footwear, which fell by 27% for that year, sales of slippers increased by 21% as consumers mixed. from cooking in the kitchen, to holding video conference calls in the bedroom, to broadcasting the latest series on the living room couch.

Retailers such as Urban, Gap, Abercrombie & Fitch, Macy’s and Nordstrom had to quickly pivot their merchandise when their lifestyle changed abruptly last spring. They removed blouses, skirts and thin pants from the mannequins, to be replaced with elastic jogging and roomy pajamas.

But the launch of the Covid vaccine has grown rapidly in recent weeks, with the US now averaging 2 million doses of vaccine daily. At the same time, the number of reported cases is declining. Encouraged by positive trends, a wave of states eased Covid’s restrictions – opening up the possibility for people to venture out to restaurants or a movie night. This means that many Americans will dig into their closets in search of something new to wear.

It’s time for retailers to pivot – again. However, this will not come easily. Companies continue to cope with crowded US ports and container shortages, overdue goods, which will make storage shelves with fresh outfits all the more complicated. Management teams said shipping delays range from three to four weeks and are associated with higher transport costs.

“Historic volumes, social distancing measures for workers, plus the lack of drivers for freight, cause significant congestion and delays in processing times,” said Wells Fargo analyst Ike Boruchow.

Macy’s department store chain said it has a plan to quickly repopulate work and formal wear as its customers begin to resume normal business. Many analysts are betting on a rapid change in shopping behavior.

“People have money in their pockets, they’re tired of the same thing, and you’ll see an explosion of shopping that feels good,” said Stacey Widlitz, president of SW Retail Advisors. “The weather is coming back and people are positive about going out again – or even sitting in the park in a dress.”

“The nature of human beings is that they want to feel good,” she added. “They want to feel fresh – especially for the younger generations. It’s your entry price to socialize again.”

Retailers are already taking advantage of this messaging. Kohl’s website proclaims the “Great Refreshment,” while the Banana Republic supports a “Spring Awakening.” The new advertising campaign of the men’s suit manufacturer, Suit Supply, which alludes to a “new normal”, went viral on social networks this week.

Others still cover their bets, however, anticipating the continuous momentum with comfortable clothing in the salon in 2021. Some consumers will probably want to stick to a more casual wardrobe – one they have become accustomed to in the last 12 months. In turn, companies could choose to relax office dress codes as their workforce returns.

Nordstrom still sells “Work-from-Anywhere Style” on the main page of the website. Rent the Runway keeps a section of its mobile app for “Fun at Home”.

U.S. teenage clothing retailer Eagle earlier this week said it expects its current quarter sales to be the strongest in three years, depending on the growth of its Aerie brand, which sells work options from home, such as yoga pants, sports bras, pajamas and underwear.

Meanwhile, Kontoor Brands CEO Scott Baxter told CNBC that jeans are coming back, while Americans are looking for a way to dress, just a little more than they did at home. Kontoor brands include Wrangler and Lee denim-focused labels.

“Denim is casual, it’s light … you can wear it, you can wear it,” Baxter said in an interview earlier this week. “As people return to the office, people think about how they’re going to dress, and denim seems to be the choice.”

But retailers simply do not have to worry about measuring the demand for clothing. They had logistical headaches for much of the pandemic. And they don’t seem to be shrinking, making planning for the spring, summer and back-to-school seasons even more difficult.

Nordstrom noted that shipping delays kept some of its holiday products from reaching shelves and warehouses on time, affecting its fourth-quarter results. It is still operating by selling this inventory, the analysts’ company said earlier this week and hopes to return to normal inventory levels by the second quarter.

Gap also said on Thursday, when it reported mixed results in the fourth quarter, that it expects port congestion to continue until the first half of the year. This will lead to high inventory levels in the second quarter, Gap said.

For Urban, the biggest problem at stake today is gaining access to containers to ship the goods, Chief Operating Officer Frank Conforti explained earlier this week.

“While, yes, ports are facing absolutely congestion, especially on the west coast … and we see delays of two to seven days in ports, the biggest challenge is actually entry ships, with enough containers in Asia to to bring the product, “Conforti said.

The limited availability of truck drivers to transport goods to retailers across the country remains another issue, Sara Eisen, CEO and CEO of Telsey Group, Dana Telsey said in an interview on Thursday.

Companies are unlikely to order their inventories to match buyers’ demand until the back-to-school season approaches, she said. But, like Widlitz, Telsey doesn’t think that will make shoppers return to stores soon for a new look.

“I haven’t had any clothing expenses in over a year,” Telsey said. “I guess [people] they want to refresh their closets. “