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.

See Full Article

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."



Advertisements

Latest Economic News

  • U.S. says ban on laptops in airplane cabins has been lifted

    Economic CTV News
    DALLAS -- The ban on laptops in the cabins of planes flying from the Middle East to the U.S. is over, as federal officials say that large airports in the region have taken other steps to increase security. Source
  • McDonald's adds Big Mac onesie, sweats to items it delivers

    Economic CTV News
    OAK BROOK, Ill. -- With McDonald's now offering a delivery service, the fast food giant is looking to make customers comfortable eating at home with a new clothing line that includes an adult-size Big Mac onesie. Source
  • Observers temper expectations for Sears liquidation deals

    Economic CTV News
    TORONTO -- Dozens of Sears stores slated for closure begin liquidation sales Friday, but bargain hunters would be wise to temper their expectations, say industry experts. Eager to avoid bankruptcy, the one-time retail giant is counting on hordes of shoppers to scoop up discounted merchandise, fixtures and equipment as soon as possible. Source
  • Price shock: Fraser report shows Ontario hydro prices surging at twice national average

    Economic CTV News
    Ontario energy prices have skyrocketed significantly higher and faster than the rest of the country over the last nine years, with Torontonians paying twice the national average, according to a report from the right-leaning Fraser Institute. Source
  • Exxon Mobil fined $2M US for Tillerson-era breach of Russia sanctions

    Economic CBC News
    The Treasury Department hit Exxon Mobil Corp. with a $2 million fine Thursday for violating Russia sanctions while Secretary of State Rex Tillerson was the oil company's CEO. Treasury said in a statement that Exxon under Tillerson's leadership had shown "reckless disregard" for sanctions that the Obama administration imposed on Russian entities in 2014 over Russia's annexation of Crimea. Source
  • Rogers Q2 net income rises 35%, beats analyst estimate

    Economic CBC News
    Rogers Communications reported a 35 per cent increase in second-quarter net income on Thursday, beating analyst estimates with an especially strong performance from its key wireless division. It's the first financial report issued by the Toronto-based telecommunications and media company on Joe Natale's watch since he became its CEO in April. Source
  • Supreme Court won't hear appeal from former Nortel employee over benefits

    Economic CTV News
    OTTAWA -- The Supreme Court won't hear an appeal from a former Nortel employee who claimed her charter rights were violated over the issue of disability payments. The employee had argued that the 2015 agreement reached on how disability benefits would be paid out in the wake of Nortel's bankruptcy was unfair and unreasonable. Source
  • Canadian travel to U.S. drops, while overseas visits to Canada surge to highest May ever

    Economic CBC News
    Canadians are making fewer trips to the United States, and foreign appetite for travel in Canada has hit its highest May on record. Statistics Canada reported Thursday that Canadians made 3.2 million trips to the United States in May, down almost eight per cent from April's level and nearly six per cent lower than the same month a year ago. Source
  • Florida house where O.J. Simpson lived listed for $1.3 million

    Economic CTV News
    MIAMI -- What happened to the Florida home where O.J. Simpson lived with his children after his acquittal in the death of his ex-wife and her friend? The 4,148 square-foot (385 sq. meter) home is currently on the market for nearly $1.3 million. Source
  • Sears and Amazon; Alexa, turn up my Kenmore air conditioner

    Economic CTV News
    HOFFMAN ESTATES, Ill. -- Sears will begin selling Kenmore appliances on Amazon.com, including smart appliances that can be synced with Amazon's voice assistant, Alexa. The announcement before the opening bell Thursday sent shares of Sears soaring 11 per cent. Source