California Apparel News

Retailers react as crowds surge but spend less on Black Friday.

Door busters and generous discounts lured legions of shoppers to malls in the early hours of Black Friday, Nov. 27, the traditional start of the holiday retail season.

While mall owners and national retailers reported good retail traffic that day—and consumers spent $41.2 billion during the weekend—Black Friday also found many independent boutique owners saying big discounts were as out of date as last year’s styles. Putting anything on sale means fighting a price war with big retailers, according to some specialty-store retailers, who said aggressive discounts would hurt their business during an already tough year.

So far, no promotional campaigns set off shockwaves in the retail market like last year when Saks Fifth Avenue announced 75 percent discounts on many items. However, promotions such as 25 percent off at affordable-fashion chain Hennes & Mauritz made crowds of people queue up at the Westfield Culver City mall in the Los Angeles suburb of Culver City, Calif., on Black Friday.

Still, some independent boutique owners opted out of offering Black Friday promotions this year. The 10-store M.Fredric chain is not offering its typical storewide discounts in December, according to Fred Levine, co-owner of the Agoura Hills, Calif.–based company. “I can’t compete with 50 percent off or 80 percent off promotions,” Levine said. “You go out of business if you try to compete like that.” (However, M.Fredric will offer occasional “spot” promotions on limited items in December.)

He said he expects M.Fredric’s sales will not be affected by the no-discount policy. M. Fredric’s customers are not hunting for bargains when they shop for premium denim and contemporary fashions at his shops for women, men and children, Levine said. Rather, they are looking for unique merchandise and quality service.

New York–based retail consultant and boutique owner Mercedes Gonzalez also counseled her clients to not discount this season. At her boutique in upstate New York, the no-discount policy has not made a dent in her sales, she said. Like Levine, she said she believes consumers will pay the extra dollar for unique merchandise and good service. Gonzalez is director of Global Purchasing Companies.

Los Angeles–based Intuition, an 11-year-old operation comprised of a physical shop and an e-commerce boutique, said it would limit its discounts mostly to free shipping. Intuition owner Jaye Hersh said she plans to avoid discounts by offering gifts priced under $75. “If we stay under a certain price point, there is no resistance from the customer,” she said. Making the case for discounting

Other independent boutiques and boutique chains said they would continue to offer discounts during the holiday season. Santa Monica, Calif.–based boutique chain Planet Blue offered a 75 percent off sale on swimwear and some apparel on Nov. 30. During Black Friday weekend, Los Angeles–based store Diane Merrick offered a 20 percent discount off all of the merchandise in her boutique. “It was a win-win situation,” boutique owner Diane Merrick said. “I was able to round up some cash. They were able to get some good buys.”

Other boutiques said that they have no choice but to offer a discount. Santa Monica, Calif.–based B.NY offered 40 percent off its collections for its loyal customers. While B.NY’s merchandise of Yohji Yamamoto and Issey Miyake is unique, fashions by these designers also happen to be sold at some of Los Angeles’ finest luxury department stores. “If Barneys [discounts] 30 percent, I have no choice but to meet that,” said B.NY owner Gregory Niebel.

Merrick said she would refrain from offering any further discounts until after Christmas. However, promotions remain a powerful tool that must be used carefully. “People are motivated by price breaks,” she said. But the power of discounts might be blunted if they are offered in the week before Christmas. By mid-December, many have already spent their Christmas budget, she said.

Crowds of Consumers Turn Out on Black Friday

Westfield Culver City general manager Chuck Martinez estimated retail traffic at his mall skyrocketed 90 percent compared with Black Friday 2008. Westfield Culver City debuted a new look and an expansion in May, and last year much of the mall was under construction.

Costa Mesa, Calif., luxury retail center South Coast Plaza estimated its Black Friday retail traffic increased 6 percent compared with the same time last year. Glendale Galleria in Glendale, Calif., reported every one of its 6,500 parking spaces was full by 7 a.m. on Black Friday. Retail traffic also skyrocketed at The Citadel, an outlet shopping center near downtown Los Angeles. The Citadel’s retail traffic increased 28 percent Thursday night and 11 percent Friday as bargain-hungry shoppers took advantage of deals such as 50 percent off fashions at stores including Ann Taylor, Banana Republic and Pacific Sunwear, according to Jess Irwin, marketing manager of The Citadel.

The National Retail Federation claimed that there was an increase of shoppers during Black Friday across the United States; however, consumers spent more frugally than Black Friday last year. In a survey released Nov. 29, the Washington, D.C.–based NRF estimated 195 million shoppers browsed through stores and e-commerce boutiques the most recent Black Friday weekend compared with 172 million in 2008. Yet average spending over the weekend dropped to $343.31 per person compared with $372.57 during Black Friday 2008. Total weekend spending reached an estimated $41.2 billion, according to the NRF.

The New York–based International Council of Shopping Centers also noted that Black Friday crowds did not spend as much as in the past. ICSC economist Michael P. Niemira said an average of 42.2 percent of shoppers claimed they finished their Christmas shopping during the Black Friday weekend. At the same time last year, 48.3 percent said they had finished their shopping by the end of the Black Friday weekend. Niemira said he believes the wait-and-see policy of some shoppers will translate into improved sales in December.