El nino - retail data

El Niño Dampens Retailers’ Apparel Sales

El Niño’s warm weather has cooled warm winter clothing sales, hurting many retailers and department stores with weaker-than-average apparel earnings.

The strong El Niño weather patterns in 2015 have been blamed for flooding along the Mississippi River and crippling droughts in Southern Africa. But their effects can be seen elsewhere, namely in the cash registers and earnings reports of major retailers.

Throughout the U.S., companies such as H&M, Macy’s and Urban Outfitters are experiencing sales droughts in apparel, normally a key piece of revenue during holiday shopping. At fault is El Niño, a weather phenomenon known to deliver warmer-than-usual winter temperatures along with persistent rain across North and South America. From November on to late December, days that usually demanded parkas, mittens and sweaters were turning into spring-like shorts and sandals weather. With fewer people feeling the chill, winter clothing sales have dipped, and typical retail patterns are becoming unpredictable.

Cooled Sales as Few Bundle Up

“This is the warmest December in nine years, and it’s going to be warm in the near future,” Women’s Wear Daily’s Arthur Zaczkiewicz professed to the Guardian last month. “It doesn’t bode well if you’re a brand like North Face or Columbia,” he added, commenting that analysts recently revised earnings projections for those two brands.

Retailers must now decide whether to sit on excess winter clothing inventory or begin liquidating it. Department stores such as JCPenney are already enticing post-holiday shoppers with deep discounts that include boots starting at $26.99 and kids’ fleece apparel as low as $4.99.

It’s not just jackets that are stuffing the store racks. Jeff Bowden, who is a director of marketing for the Maryland-based chain DTLR, told the Baltimore Sun recently that “Our [boots] are not selling as well as we would like this time of year … and sweatshirts are selling not as quickly.” With 100 stores in 13 states, his company is feeling the pressure. “We don’t want to panic yet. We don’t want to not have the inventory when it does get cold.”

Sunshine on the Horizon?

But some are optimistic that colder weather is coming, which can be a motivator for chains like DTLR to sit on inventory. After record snows and chillier-than-usual temperatures the last several years, a strong trend of cold weather purchases has been something retailers have come to rely on. And they may just get the reprieve they’re seeking. Reuter’s global agriculture columnist and meteorology expert Karen Braun writes there is strong evidence the El Niño system has already peaked and is beginning to wind down.

Even without the clouds parting, some retailers do not seem to mind the warmer weather. Also speaking to the Baltimore Sun, John Bacon of upscale shoe stores Van Dyke & Bacon says that the warmer weather has encouraged others to come shopping. “Yes, our boot business is down and that’s not a great thing, but the regular shoe business is up, and regular shoe business is more of the overall business,” he optimistically observed.

If history is any indicator, El Niño could also bring earlier-than-usual sales of items like warm weather clothing, outdoor sports gear and gardening supplies before the official start of spring. Retailers also note an increase in raingear sales. Many are already enjoying a break in the unusual weather patterns as we get out of this wet, warm and messy winter season into a typical dry, chilly one like Americans are accustomed to.

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