Warm weather leads to overflowing stocks of winter apparel

MONTREAL -- Bargain shoppers are enjoying deep discounts on winter apparel as unseasonably warm weather in Eastern Canada has left retailers with overflowing stocks of snowsuits, boots and tuques.

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Sales of winter outdoor clothing have plummeted as a result of temperatures that have been above normal this winter, said Fred Fox, CEO of Planalytics, a Pennsylvania firm that researches how weather affects North American businesses.

Ontario and Quebec recorded their warmest and driest November and December in more than 55 years, Fox said. Sales of winter boots were down 16 and eight per cent in those two months compared to the same period the previous year, while winter wear was off 11 and three per cent.

He said the next 30 to 45 days will be a bonanza for those shopping for winter clothing.

"If you don't need it for this season, certainly stock up on it for next season," he said. "If it's not marked down 75 per cent, it will be very soon."

Apparel is a retailer's cash crop, generating hefty margins exceeding 50 per cent. But unloading excess inventory can be painful for the bottom line.

Department stores like Hudson's Bay have aisles overflowing with apparel, some of which may be warehoused for next season or make its way to discount stores such as Saks Fifth Avenue Off 5th which HBC is set to launch in Canada this spring, Fox said.

Hudson's Bay acknowledged that short-term factors like weather had some impact on winter apparel sales. But industry analysts note that warmer temperatures also drove traffic into stores and boosted sales of housewares, jewelry and summer items like lawn mowers and bikes.

"We have a very diversified business mix and we had good strength in areas like Canada -- which helped offset some other areas of weakness," HBC said in an emailed statement.

Mark Pascal, vice-president of Montreal winter clothing accessories manufacturer Kombi, said he welcomed a deep freeze that gripped the city this week as it will help increase sales for retailers.

Still, he said it comes too late to salvage the season.

"It's hard to catch up on a December that's one of the most mild in history," he said.

While weather is merely a bump in the road for diversified retailers like Hudson's Bay, it could be the final nail in the coffin for weaker companies that are already in trouble, said Jim Danahy, CEO of retail advisory firm Customer Lab in Toronto.

"It could conceivably be the coup de grace to somebody who's already on life-support," he said.

Danahy said the effects of the warm winter and the weak loonie are going to show up in the fourth and first quarter results of retailers.

"You're reading about their struggles right now, so depending on how well they bought and how well they've done, you never know which straw breaks the camel's back."



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