Friday, November 14, 2008

WSJ: Drop in Consumer Spending Creates Glut of Name Brands

I knew it would happen! I think 2009 will be my best year ever! Heart, GSNYC.

The Bright Side: Deep Discounts From Retailers --- Drop in Consumer Spending Creates Glut of Name Brands; 31% Off a Croc-Embossed Tote
By Jennifer Saranow and Christopher Lawton
13 November 2008
The Wall Street Journal

Financial markets are in the tank, and the economy is grinding to halt -- a great time, it turns out, to shop.
Shoppers can find a bonanza of deals on everything from Prada shoes to premium jeans and smart phones. Discounters like T.J. Maxx and and outlet stores like Saks Fifth Avenue Off Fifth are all stocking some of the best selections of apparel, accessories and electronic goods -- at some of the best prices -- due to the sharp falloff in consumer spending that has forced full-price stores to unload excess inventory.
Shoppers like Kristle Bonfield, a 23-year-old nurse technician and regular T.J. Maxx customer, have noticed the difference. The store she frequents in Manhattan has lately been stocking a wider selection of high-end jeans from labels such as True Religion, Joe's Jeans and Paper Denim & Cloth, she says. Ms. Bonfield says she was able to pick up a pair of 7 for All Mankind jeans for about $80 that she later saw at Bloomingdale's for more than $200.
Kimberly Greenberger, an analyst at Citigroup Inc., expects the deals to only get better into next year if consumer spending stays weak, which industry-watchers are expecting. In a survey of 1,000 people earlier this month by America's Research Group, nearly half of the respondents who said they've shopped at luxury stores in past Christmas seasons say they won't be shopping at those stores this year -- meaning more merchandise could be headed to off-price stores, online discounters and outlet stores., an online discounter based in Salt Lake City, will be selling items at 15% to 45% off full retail price for the holidays. Even now a gray crocodile-embossed tote bag from Yves Saint Laurent sells for $1,300 on the site, a discount of 31% from the retail price of about $1,900. Since mid-September, the company has been snapping up high-end apparel, boots, shoes and handbags from brands such as Prada, Gucci and Jimmy Choo that it has never carried before. Its inventory of shoes alone has swelled to 55,000 pairs from fewer than 2,000 before September.
Retail Ventures Inc.'s DSW stores are offering up to 75% off designer shoes from brands like Ralph Lauren and Sergio Rossi, compared with discounts of up to 50% last year, while Loehmann's recently advertised a "big fashion event," with discounts of up to 70% off on apparel from designers, including Nanette Lepore and Marc by Marc Jacobs.
"We are really seeing more and better brands across the board, in all categories of apparel, accessories, footwear, bath and body, and home fashions," says Sherry Lang, spokeswoman for TJX Cos., which owns T.J. Maxx and Marshalls stores, two of the largest off-price retailers.
Rival Ross Stores Inc. has also "been able to take advantage of an increased supply of better merchandise, including getting some new brands in our stores," says spokeswoman Bobbi Chaville. And Stein Mart Inc., which recently rolled out a premium jeans section in all its stores, says it now carries at least half a dozen premium jeans brands, up from one or two last year.
Many of the stores generally won't name the new brands for fear of being cut off by the labels, which face a delicate balancing act in times like these. The ability of designer brands to command high prices depends on their image as luxury items sold exclusively at high-end stores. But if orders are canceled or the goods don't sell once they hit a store, the labels often show up in "off-price" stores.
Shopping at off-price retailers, of course, isn't easy. Most of the stores try to create a treasure-hunt atmosphere that requires sorting through racks crammed with a jumble of brand names. And some of the merchandise is so picked over that it is damaged, like a Vince cashmere cardigan with a hole near the collar that was being offered recently by T.J. Maxx for $149.99.
But Maria Elena Friskel, a retiree from Kansas City, Kan., and a regular shopper at B&H Factory Outlet Inc. on eBay, says she likes the fact that the site starts bidding on all dresses at just 99 cents. Last month, she purchased a Calvin Klein velvet evening dress that was originally priced at $198 for just $25, a price that included shipping.
Today's deals aren't limited to fashion. Dyscern LLC, an and eBay seller of handheld electronics, says it is now getting good prices on MP3 players, smart phones and portable DVD players that have been returned to big-box electronics stores. Dyscern then passes along the savings to consumers. For example, a Palm Inc. Treo smart phone, which retails normally for $579, is selling for $189 on the site, a discount of 67%.
And, a unit of Systemax Inc., has been snapping up TVs, laptops and LCD monitors from manufacturers in the past three to four weeks, in part because of big box retailers canceling orders, says Chief Executive Gilbert Fiorentino.
Such deals, at savings of up to 20% off retail prices, can be found near the bottom of the Web site under the "e-deals" section and usually sell out in 24 to 48 hours, he says. On the site, a 46-inch high-definition liquid-crystal-display television set that would retail for about $1,300 is discounted 30% to $900.
Bargain Hunting

Tips for cost-conscious consumers:

Expect bargains throughout the holidays and even into the new year if sales continue to disappoint retailers.

Markdowns extend to more designer brands and a greater selection of items than in the past.

At some stores, be prepared to sift through racks of picked-over merchandise.

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