Apparel prices haven’t budged in past year
As we were looking through Tuesday’s consumer price index report, a number on Page 12 caught our attention. That number is zero. 0.0%, in fact. That’s how much apparel prices were up in February from the same time last year.
There were some changes within apparel, of course — footwear prices, for example, increased a bit and watches went down. But at a time when prices overall are rising, what’s keeping the cost of clothing, on balance, the same?
At June Ruby, a women’s clothing store in the Denver area, owner Michelle Rotter said one big seller is hats embroidered with the local area code — 303.
People like to showcase their local pride, she said. “Even people who live here wear stuff from Denver while they’re in Denver.”
The hats start at $28. Rotter said she’s able to mark them up a bit because they’re pretty unique.
But she also carries a lot of big brands and said the margins for those clothes are lower than they used to be.
“Before, we could have marked things up more. Now their retail suggested price is actually a little bit lower,” she said.
That’s because clothing manufacturers are reading the economic room, so to speak.
Natalie Kotlyar, who follows retail trends for BDO, said they know what people are open to paying.
“So consumers are not willing to pay higher prices for something that’s not a necessity,” she said.
Kotlyar said a couple of years ago, there was pent-up demand for office-ready pants and bow ties to wear to all those delayed weddings. And now?
“People that have gone back to work have been back at work for quite some time,” she said. “And there really isn’t as much of a reason to go out and make that big, significant apparel purchase.”
That lower demand for clothes has kept prices from rising.
One reason they haven’t gone down, though, is that retailers are better at managing inventory. If you have too much stock, you have to offer big discounts to get it out the door, said Poonam Goyal with Bloomberg Intelligence.
“But when you have just the right amount of inventory, you can sell it at full price,” she said.
Another thing to note: Clothes just aren’t a priority in February, when there’s not a lot going on.
But, Goyal said, you never know what will happen in the year ahead.
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