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Stores mark down new fashions early

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Steve Chiotakis: Abercrombie & Fitch, seller of hip clothes for youngsters, saw profits drop last quarter. Lower sales at its stores brought numbers down by more than half from a year earlier. The company says it expects a difficult selling environment and did not issue an earnings outlook.

And in this economy, clothes aren’t an easy sell. As New York fashion week kicks off, designers are fearing their new fall lines will be discounted before the season even begins. From North Carolina Public Radio, here’s Marketplace’s Janet Babin.


Janet Babin: Retail sales jumped about a percent last month, but analysts call it a blip that won’t be repeated again for months. Despite the gloom, 70 designers are in Manhattan this week trying to sell their latest collections.

Nanette Lepore: I know, isn’t it frightening?

That’s designer Nanette Lepore. She runs nine of her own boutiques and sells her clothes to department stores.

That made for a sticky situation over the holidays. Many stores slashed prices on new clothes around Thanksgiving, often without telling the designers:

Lepore: We were forced in my own stores to mark down some of the holiday merchandize sooner than we would have marked it down. But I guess it was a necessary thing to do to sort of turn the merchandize and clean out the floor.

The last thing anyone wants is a store full of “So last season.”

Some top designers including Lepore have decided to trim what clothes department stores will get. And she’s saving her exceptional pieces for her own boutiques.

I’m Janet Babin for Marketplace.

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