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Most firms will feel the pinch and some will fall in the aftermath of the worst holiday retail season in 30 years, according to Seventh Avenue executives, who are prepared to dole out markdown money to share the burden of lost sales.
What will ultimately save the season from disaster is the silver lining of good planning. Stores and vendors weren’t thinking big gains and they kept a tight lid on inventory levels. This will allow for fresh buying sprees from stores this year and won’t leave vendors looking to dump dead merchandise.
Vendors that are well entrenched at the designer and bridge end of the business considered themselves to have dodged a bullet through the harsh holiday selling season due to a combination of lower inventories of fall merchandise, already dramatically marked down by mid-December, sitting next to new arrivals from their resort collections marked at full price.
Roger Farah, president and chief operating officer of Polo Ralph Lauren Corp., said: "Everybody went into the holiday season very cautious. Last fall, because of Sept. 11, there were a lot of goods around and everybody promoted.
"I think inventories are pretty clear and pretty in line. There will be a nice flow of fresh product going into the stores. There was a lot of promoting at Christmas. Margins will be under pressure. It’ll be a very introspective time for retailers, who will be thinking, ‘what do we do next year?’"
Gordon Finkelstein, president of Tocca, said: "Most importantly, it’s been a difficult environment since spring 2001. As a result of that, retailers overall have been cautious for several seasons and that strategy has paid off for them with dividends at their inventory levels. It’s been a difficult holiday season and it’s tough, but they’re not sitting with the high inventory levels they would have coming out of a real boom. They were not as hurt or stuck as they might have been."
Robert Duffy, president of Marc Jacobs, said: "We started getting inventories in line at the end of 2001. We weren’t in an overbought situation and our inventories are in line for both the fall and resort ready-to-wear seasons. Our sell-throughs have been very good."