California Apparel News

Economic indicators point toward an increase in sales, 4.1 percent, for the upcoming winter holiday season, Kimberly Ritter-Martinez, an economist for the Los Angeles County Economic Development Corp., said during a 2014 holiday retail panel at the Glendale Galleria mall in Glendale, Calif., on Nov. 13.

“We are looking forward to a much better holiday season this year,” she told journalists during the Galleria’s panel. The National Retail Federation reported that sales increased 3.8 percent during the 2013 holiday season, which missed the trade group’s forecast of 3.9 percent increase, according to a January 2014 statement from NRF.

But the forecast does not mean it will be a perfect holiday season. Macy’s Inc. made headlines on Nov. 12, when it cut its profit and sales forecasts for the year after a third quarter when the retail giant did not perform as well as it forecasted. Current guidance for the full year of 2014 is an increase of 1.2 percent to 1.5 percent compared with a previous guidance of growth of 2 percent to 2.5 percent. In a company statement, Terry J. Lundgren, Macy’s chairman and chief executive officer, said the company is optimistic about its crucial fourth-quarter holiday season.

A steady decline in unemployment in California and across the U.S. and rebounding of consumer confidence are two reasons why retailers could avoid holiday gloom, Ritter-Martinez said. California’s unemployment rate was 7.3 percent in September, during the last pulse reading from the Bureau of Labor Statistics. The U.S. unemployment rate was 5.8 percent for the same time period.

Consumer confidence has picked up recently, according to The Conference Board, the nonprofit business research group that measures confidence in the U.S. economy. “Looking ahead, consumers have regained confidence in the short-term outlook for the economy and labor market and are more optimistic about their future earnings potential. With the holiday season around the corner, this boost in confidence should be a welcome sign for retailers,” Lynn Franco, the Conference Board’s economist, said in an Oct. 28 statement.

But if employment gains are giving consumers the confidence to buy presents, stagnant wage growth means that many shoppers will continue to seek out deals and markdowns and shop at discounters and off-price stores, Ritter-Martinez said.