California Apparel News

With the backdrop of manic rallies and drops in the stock market, retail analyst Jeffrey Van Sinderen described the economy as a roller coaster. “We’ve had so many ups and downs this year,” said Van Sinderen, who works for Los Angeles–based financial-services firm B. Riley & Co. “The economy is bumpy. There are a lot of fits and starts. It has recovered to a small degree, but there is a lot of uncertainty.”

This year, holiday forecasts are all over the map. On Sept. 23, high-profile pollster C. Britt Beemer of America’s Research Group released a survey predicting that Christmas shopping will be dismal. “Pessimism among Americans about the upcoming Christmas season is off the charts,” Beemer said in a statement. According to his survey, a record 43 percent of American shoppers plan to spend less in the last quarter of 2010 compared with the last quarter of 2009. Only 11 percent expected to spend more during the 2010 Christmas season, according to Beemer’s prediction.

In another blow to economic morale, on Sept. 22, Moody’s Investors Service downgraded its credit outlook on the U.S. retail sector from “positive” to “stable.” The research and credit-rating company said that holiday sales would increase marginally compared with the past year.

However, other prominent forecasts predict some cheer for retailers this holiday. On Oct. 6, the National Retail Federation forecast that holiday retail sales will enjoy steady but moderate growth. Christmas retail will increase 2.3 percent to $447.1 billion in 2010, the NRF said. The 10-year average for holiday sales is an increase of 2.5 percent.

The International Council of Shopping Centers offered a more robust forecast. On Oct. 5, the New York–based trade group predicted sales for the 2010 Christmas retail season to increase 3 percent to 3.5 percent compared with the 2009 holiday retail season, according to ICSC chief economist Michael Niemira.

“The key story is that the retail recovery continues, and that bodes well for the upcoming holiday shopping season,” Niemira said. “Additionally, we expect holiday hiring to improve moderately over last year and overall employment growth to improve as well, which, in turn, should support increased spending.”

The NRF’s findings are based on monthly sales reports as well as indicators of employment, industrial production and disposable personal income. America’s Research Group bases its findings on telephone surveys with consumers.

Other economic indicators are similarly split. For example, California’s unemployment rate remains stubbornly high. On Sept. 17, the state’s Employment Development Department announced California’s unemployment rate increased to 12.4 percent in August, compared with 12.3 percent in July. The U.S. unemployment rate in August was 9.6 percent. Last year in August, the state’s unemployment rate was 12 percent.

But several large retailers are planning to hire this holiday. Macy’s said it will hire 65,000 seasonal workers for the upcoming holidays. Kohl’s announced plans to hire about 40,000 holiday workers this year, a 21 percent increase over last year, when the Menomonee Falls, Wisc.–based department store chain hired 33,300 workers. Prominent human-resources company Challenger, Christmas & Gray forecast hiring for the Christmas holiday season would increase compared with 2009 but would not hit the highs of 2007, when holiday payrolls grew by 720,800.

Other retailers announced expansion plans. Wet Seal forecast it will build 60 stores in 2011. On Sept. 28, JCPenney announced its “Long Range Plan,” which includes renovating 375 stores by 2014. Los Angeles–based brand James Perse announced it plans to build more than 25 boutiques in the United States under the company’s Yosemite activewear brand and 35 James Perse stores throughout the world in the next five years.

According to Perse spokesperson Noah Stone, business is growing steadily. “We remain cautiously optimistic that we can continue to grow in this climate, especially with a real estate market that is ideal for growth,” Stone wrote in an e-mail.

Business is improving, according to San Francisco boutique owner Sasha Wingate. Sales for her BellJar boutique have increased 28 percent compared with its sales in 2009. However, she said she sees the most opportunities for holiday growth at her e-commerce site (www.belljarsf.com), which debuted in March. “A website is a good place to grow a brand without much overhead,” Wingate said.

Several public-works projects in the Southern California region—as well as strong business in international trade, tourism, and film and television production—should also help ring in holiday sales in Los Angeles County, according to Jack Kyser, chief economic adviser for the Southern California Association of Governments.

There are several ongoing public-works projects at the ports of Los Angeles and Long Beach and at the International Terminal at Los Angeles International Airport, Long Beach Airport and San Diego International Airport, as well as the expansion of the Exposition Light Rail Transit Line in Los Angeles.

“I believe that there will be an increase in sales over the last year, but it won’t blow your socks off,” Kyser said.