An Anthropologie on Fashion Island employee greets customers at the store in Newport Beach, CA on Tuesday, May 26, 2020.
Paul Bersebach | MediaNews Group | Orange County Register via Getty Images
Some of us say "so long" about sweatpants.
In the last week of February, seven of the top ten best-selling items on the anthropology website were dresses, the company, a unit of Urban Outfitters, said during a conference call this week. Up until that point, it was lucky to have only included one or two dresses in the top 10 list.
Richard Hayne, CEO of Urban Outfitters, described the change as striking and very positive.
"Until recently, fashion was mostly … casual and comfortable at home," said Hayne. "We're starting to see what I call 'go-out fashion' is starting to catch on. The clothing business is going to change in terms of the categories we sell."
Apparel sales fell 19% last year as Americans stayed at home and focused their spending on groceries and other household items, according to market researcher The NPD Group.
When shoppers were shopping for clothing, convenience was the issue: sweatpants sales rose 17% year over year and nightwear sales rose 6%, according to NPD. For fashion shoes, which fell 27% over the year, slipper sales rose 21% as consumers mixed From cooking in the kitchen to holding video conferences from the bedroom to streaming the latest series from the living room sofa.
Retailers like Urban, Gap, Abercrombie & Fitch, Macy & # 39; s and Nordstrom had to swiftly swivel their wares when lifestyle changed abruptly last spring. They pulled blazers, skirts, and slim-fitting pants from mannequins to replace them with stretchy joggers and roomy pajamas.
However, the adoption of Covid vaccines has increased rapidly in recent weeks. In the United States, an average of 2 million vaccine doses are currently administered each day. At the same time, the number of reported cases is falling. Encouraged by the positive trends, a wave of states has eased restrictions on Covid – opening up the possibility for people to venture into restaurants or spend a night at the movies. That means many Americans will be looking for something new in their closets.
It's time for retailers to turn again. It won't be easy, however. Businesses continue to face congested US ports and shortages of containers, leading to a backlog of goods, which makes warehouse shelves with fresh outfits all the more complicated. According to management teams, the shipping delays are between three and four weeks and are associated with higher transport costs.
"Historical volumes, social distancing measures for workers and the lack of drivers to unload goods lead to congestion and significant delays in processing times," said Ike Boruchow, an analyst at Wells Fargo.
"Sick of equality"
Macy & # 39; s department store chain has announced it has a quick restocking and evening wear plan as its customers resume more normal activities. Many analysts are counting on a rapid trend reversal in purchasing behavior.
"People have money in their pockets, they are tired of equality and there is going to be an explosion of feel-good shopping," said Stacey Widlitz, president of SW Retail Advisors. "The weather is turning and people feel positive when they go out again – or even sit in the park in a dress."
"The nature of people is that they want to feel good," she added. "You want to feel fresh – especially for the younger generations. It's your entrance fee to make new contacts."
Retailers are already taking advantage of this news. Kohl's website proclaims "The Great Refresh" while Banana Republic advertises "Spring Awakening". A new ad campaign from men's suit maker Suit Supply, hinting at a "new normal", went viral on social media this week.
However, others are still hedging their bets, Some consumers will likely want to stick to a more casual wardrobe that they have become accustomed to over the past 12 months. Corporations, in turn, might choose to relax the dress code in the office when their workforce returns.
Nordstrom continues to market "Work-from-Anywhere Style" on the home page of its website. Rent the Runway includes part of its mobile app for outfits for Entertaining at Home.
Tween and teen clothing retailer American Eagle announced earlier this week that its current quarter sales will be its strongest in three years. This depends on the growth of its Aerie brand, which sells work-from-home options like yoga pants and sports bras, pajamas, and lingerie.
Scott Baxter, CEO of Kontoor Brands, told CNBC that jeans are making a comeback as Americans look for a way to dress up, only slightly more than at home. Kontoor's brands include denim labels Wrangler and Lee.
"Denim is casual, it's just … you can wear it, you can wear it," Baxter said in an interview earlier this week. "When people go back to the office, people think about how they're going to dress and denim seems like the choice."
Logistical headaches persist
Retailers don't just have to worry about measuring demand for resuscitated garments, however. They had logistical headaches for much of the pandemic. And those don't seem to be letting up, which makes planning for the spring, summer, and back-to-school seasons even more difficult.
Nordstrom found that shipping delays caused some of its vacation merchandise not to hit shelves and warehouses on time, which hurt fourth quarter results. Work is still in progress to sell this inventory, the company told analysts earlier this week and hopes to get back to normal inventory levels by the second quarter.
Gap noted Thursday that ports congestion is expected to continue into the first half of the year, when mixed results were reported for the fourth quarter of the fiscal year. This will lead to increased inventory levels in the second quarter, the company said.
For Urban, the bigger problem today is getting access to containers for shipping goods, said Frank Conforti, chief operating officer, earlier this week.
"While the ports, especially on the west coast, are absolutely overloaded … and we are seeing two to seven days delay in the ports, the greater challenge is actually with the incoming ships that have enough containers over in Asia to import products "said Conforti.
The limited availability of truck drivers to move goods across borders from retailers remains another problem, said Dana Telsey, CEO and chief research officer of the Telsey Advisory Group, in an interview with CNBC's Sara Eisen on Thursday.
Companies are unlikely to sort their inventory until just before school starts to meet buyer demand, she said. But like Widlitz, Telsey doesn't think this will stop shoppers from hitting the stores again for a new look anytime soon.
"We haven't had any apparel spending in over a year," Telsey said. "I think [people] want to freshen up their closets."