Retailers' misery is a boon for coat buyers
For coat retailers, it's worse than a winter of discontent. It's one of deep discounts. The unseasonably warm weather and zero snow have left piles of unsold winter merchandise on stores' floors.
For coat retailers, it's worse than a winter of discontent. It's one of deep discounts.
The unseasonably warm weather and zero snow have left piles of unsold winter merchandise on stores' floors.
While no one has tracked the overall losses, retail analysts say it's easily in the hundreds of millions of dollars for the year's last quarter, causing havoc at stores from Macy's to Burlington Coat Factory.
All that red ink is a boon for consumers, though. This month, several retailers resorted to deep discounting of coats, which typically doesn't occur until February or March.
Coats were marked off from 60 percent to 73 percent at the Boscov's at Neshaminy Mall. For store manager Karl Hess, the pressure can be summed up in a word: space.
Retailers need it, and coats occupy a lot of it.
"Swimwear is already coming in," Hess said this week as he showed off the disorienting racks of bikinis next to coats on the first floor.
"The reasoning is, if you don't buy a coat by the end of February, then you're not going to buy one [this year], and we really need this pod for swimwear," he said.
The coat sale extended to all designer brands: Calvin Klein, Michael Kors, London Fog, Fleet Street - you name it.
On Wednesday, the giant "On Sale" signs weren't lost on customers.
"We're here to take advantage of it," said Elaine Barsky, as she shopped with her son Craig Braverman, 55, for a coat for his wife, Rose, 48.
"You can't beat these prices," said Braverman, a musician from Huntingdon Valley, as he pulled out a black, women's Arctic Expedition long coat that normally sells for $260, but was marked 60 percent off, down to $104.
Besides the coats, scarves, and gloves were more than half off, including those by designer Adrienne Vittadini that were on sale for $11.99 a pair, down from $30.
"We are hearing from many of our clients that the unusually warm holiday season had a significant impact on certain categories, such as sweaters and coats," said Bill Park, head of retail for the Philadelphia region at consultant Deloitte L.L.P. "Now, that the weather has turned more seasonal . . . there should be great deals."
It's been the same story nationally.
"While retailers were grappling with an intensely competitive environment fostered by fast fashion entrants such as Primark, H&M, Uniqlo, and Forever 21, as well as from other pure play-online retailers, such as Amazon.com and Zulily, Mother Nature was playing a cruel trick on the retail industry," said Ken Perkins, president of research firm Retail Metrics, Inc..
December's average temperature was 51.2 degrees in Philadelphia, 13.7 above normal, far and away a record.
December's normal snowfall in Philadelphia is 3.4 inches; December 2015 had 0.0 inches.
Perkins said his Retail Metrics Fourth Quarter Earnings Index of 119 publicly traded retailers projected 3.5 percent year-over-year earnings growth on Nov. 1.
But earnings growth, he said, now stands at -0.4 percent.
Macy's, which allocates a large portion of its sales floors to winter related apparel, was most notably hurt, attributing as much as 80 percent of its comparable year-over-year store sales decline to cold weather related goods.
Macy's reported that holiday sales were down 5.2 percent from a year ago, and the parent company announced layoffs at its 770 stores last week.
At Burlington Coat Factory in Center City, clearance signs were throughout the store Thursday. Holiday sales for fourth-quarter 2015 were flat.
"While we are pleased with the strong response to our gift assortments, especially in fragrances, bath and body, and home, these increases have been offset by headwinds affecting our cold-weather assortments, especially in coats and outerwear," said Tom Kingsbury, president and chief executive officer.
The cold spurt earlier this week was welcomed by retailers, who say it at least reminded people to go out and get coats.
But the temperatures are expected back in the 50s on Friday.
For several retailers, it might be too little too late for their winter bottom line.
"Coats, boots, scarves, gloves, and the like lost about 20 percent of their normal regularly priced business," New York retail consultant Howard Davidowitz said of the eight major retailers he tracks.
It was wall-to-wall coats on sale at Zara, on Walnut Street in Center City, where Liz Cover of Fishtown had just emerged.
Cover, to her chagrin, said she had bought a winter coat in mid-September as a 28th birthday present to herself and because she "didn't want to wait too late" like she did last year.
Now, she said, she shakes her head at all the markdowns on coats everywhere she goes.
"It's crazy," she said after stopping at the Nordstrom Rack at 1700 Chestnut St. to look at long-sleeve shirts. "It makes sense since they have to get rid of them for the spring stuff."
Although she avoided the racks of coats next to her that were more than half-off, she proudly showed off a white cape jacket that she had just bought at Zara for $59.99, down from $100.
215-854-4184@SuzParmley