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Why
are jeans sales so bad? Blame Sears and Penney, and jeggings VF Corp is the latest clothing maker to publish financial results that show Americans are turning away from the fashion staple. Everybody wears jeans, but few people seem to be buying new pairs. VF Corp VFC 1.88%, the maker of Lee and Wrangler jeans, on Friday became the latest clothing maker to publish financial results that show Americans are just not as keen as they used to be on the fashion staple. The one blemish in VF’s otherwise stellar second-quarter numbers (sales soared at its The North Face, Vans and Timberland brands) was a 7% drop in sales of Lee jeans in the Americas. The decline was particularly pronounced in women’s jeans. In a press release, the company pointed the finger at “on-going challenges in the U.S. mid-tier/department store channel.” While the company did not name names, the department stores that sell Lee are primarily J.C. Penney JCP 2.96%, Kohl’s KSS -0.32%and Sears SHLD 1.49%. All three are dealing with problems such as a drop in traffic to malls and price-conscious shoppers, on top of their own strategic misfires. What’s more, department stores are giving a bigger push to their store brands, adding to the pressure. (VF’s Wrangler brand, not sold in department stores, did much better, with sales up 4%). “We are selling to a channel that’s been challenged,” VF’s Chief Financial Officer Bob Shearer told Fortune. VF’s jeans problem echoes that of Levi Strauss, which last week blamed its quarterly revenue drop in the Americas on “lower sales of women’s products at wholesale.” Guess Jeans GES -0.09%similarly reported its North American wholesale revenues fell 10% in the quarter ended May 3. But the department store problems are not the only factors at play here. Fashion choices are changing: more and more women are wearing leggings and jeggings, while many men are eschewing jeans for chinos to be dressier at work. And there are more and more jeans brands out there, making them a commodity. “One of the biggest challenges for denim is the consumer movement towards active and casual,” NPD Group Chief Industry Analyst Marshal Cohen wrote in a recent blog post. According to NPD Group data, total U.S. jeans sales fell 5% in the year ended in March, continuing a long decline. So with consumers already owning plenty of pairs of jeans, and out of the habit of replenishing their jeans collection, it’s getting harder to get customers to shop. And Cohen said innovation is what might save the day for denim makers. VF, the largest clothing manufacturer in the world, is heeding his call and is working on jeans that feel more like leggings and activewear for later this year, Shearer said. VF expects them to sell well.
Source:http://fortune.com/2014/07/18/why-are-jeans-sales-so-bad-blame-sears-and-penney-and-jeggings/
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