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

  • Company sold turf product after learning of defects: report

    Economic CTV News
    WOODBRIDGE, N.J. -- The country's leading maker of artificial sports turf sold more than 1,000 fields to towns, schools and teams nationwide after its executives knew they were falling apart faster than expected and might not live up to lofty marketing claims, according to an investigation by a news organization. Source
  • Montreal-based company sold turf product after learning of defects: report

    Economic CTV News
    WOODBRIDGE, N.J. -- The country's leading maker of artificial sports turf sold more than 1,000 fields to towns, schools and teams nationwide after its executives knew they were falling apart faster than expected and might not live up to lofty marketing claims, according to an investigation by a news organization. Source
  • U.S., China, EU, others fail to reach environmental goods deal

    Economic CTV News
    GENEVA -- Forty-six countries including the U.S., China and European Union nations failed Sunday to agree on a list of "environmental goods" like solar-powered air conditioners or LED light bulbs that could be targeted for lower tariffs. Source
  • Venezuela to issue new bills with current ones worth no more than 2 U.S. cents

    Economic CTV News
    BOGOTA -- Venezuela said it will issue higher-denominated bills as triple-digit inflation and a currency meltdown leave the country's largest note worth just around 2 U.S. cents on the black market. The central bank said in a statement Saturday that six new bills ranging from 500 to 20,000 Bolivars will begin circulating on Dec. Source
  • Six things to know about the bovine TB outbreak: CFIA's chief veterinary officer

    Economic CTV News
    OTTAWA -- More than 22,000 cattle at farms in Alberta and Saskatchewan are quarantined due to bovine tuberculosis, causing hardship for ranchers and millions in compensation payments and other costs. The Canadian Food Inspection Agency is testing cattle to determine the extent of the outbreak and the source of the contagious bacterial infection. Source
  • U.K.'s Boris Johnson downplays EU payment suggestions

    Economic CTV News
    LONDON -- Britain's foreign secretary has dismissed suggestions that London would be willing to pay into European Union coffers following an exit from the bloc, describing the idea as speculation. Boris Johnson's comments to the BBC on Sunday came after Britain's minister for leaving the European Union, David Davis, said that the country might be willing to pay in return for access to the single market. Source
  • Beyond the hippie stereotype: A closer look at the opposition to Trans Mountain

    Economic CBC News
    A conversation about tripling your money on a tech start up might seem out of place at an anti-pipeline march, but not so in Vancouver. When thousands of protestors made their way from City Hall to downtown a few weeks ago, chatter about stock options and where to go for ramen after the rally could be heard alongside the traditional indigenous drumming and chants of "Hey, hey, Trudeau, Kinder Morgan's got to go". Source
  • Using Air Miles for overseas flights? It may not be a great deal

    Economic CBC News
    You've saved your Air Miles for a well-deserved overseas adventure — but don't pack your bags just yet, as you may be in for a surprise. Seventeen million Canadians collect Air Miles reward points on everything from groceries to gas. Source
  • Airbnb drops lawsuit against NYC over new state law

    Economic CTV News
    NEW YORK -- Airbnb has agreed to drop a lawsuit against New York City over a new state law it said could have deterred hosts and impaired its revenues. The settlement was reached Friday. Source
  • France pledges $30 million for wartime heritage protection

    Economic CTV News
    ABU DHABI, United Arab Emirates -- France committed $30 million toward protecting cultural heritage sites during wartime on Saturday, a first step in the creation of an international fund aimed at preventing destruction like that carried out by Islamic State militants. Source