Fashion retailers cutting costs and inventory amid the economic crisis
VCU Communications and Public Relations
The economy has been in crisis for some time now, but Karen Videtic, chair of the Department of Fashion Design and Merchandising at Virginia Commonwealth University, says that clothing retailers are just adjusting now, and consumers can expect big changes on the sales floor.
“The sales floors won’t look as deep. They may have the same amount of styles, but not in the depth of the colors and sizes they had before, or they might just have fewer styles,” Videtic said. “You may go into a store and it will look a lot less crowded. The racks may look a little thinner.”
Fashion retailers are cutting their inventory after having to massively mark down prices on extra merchandise over the past year. And because retailers are making drastic changes, Videtic warns that consumers should not expect the same deals that have been prominent.
“[Retailers] kind of trained us over the last six months to not buy full price, because it’s going to get marked down. All the retailers are marking things down,” Videtic said. “But what may well happen coming up this holiday season is, because they bought narrower and closer, taking a lot less risks than they had previously, we may well find that when we go to the stores, there will be less merchandise. So my advice to consumers would be, buy early, so you get what you want. And don’t expect the mark-downs we saw last year.”
Retailers are doing a lot to cut their costs, and according to Videtic, stores will look sparse because of less merchandise and fewer sales people. But in this economic crisis, that might not be enough, forcing clothing retailers to look for more creative ways to cut back.
Videtic says clothing stores can not get much cheaper labor than they already have, so many retailers are cutting back on manufacturing by selling their warehouses and changing their fabric choices in favor of cheaper materials. Because of these changes, Videtic says buyers need to be extra careful.
“You have to be a little savvier than you were in the past few years. You have to really check out the fabrication, and you need to look at the details to see whether you’re really getting a good deal,” said Videtic. “It may look like a great deal – ‘oh look how much cheaper it is this year’ – but you need to see where they cut their costs.”
Clothing merchandisers are not the only ones taking a step back because of the economy. Videtic says the recession may have lasting effects on how consumers value clothing items, particularly certain brands. By having to cut back on spending, many fashionistas are changing their minds about spending hundreds of dollars more on a garment for the label alone.
Consumers are changing their “perceived value” of brands, she says, and starting to put more emphasis on function and garment quality than designer names.
Merchandisers are making such enormous changes to adapt to the recession that they will not be able to turn it quickly back around when the economy picks up, Videtic says.
“This is a really deep change. So if the shift changes back, how fast can you get the factories up and running again? Probably not fast enough,” Videtic said. “So I think for us, as consumers, we need to be aware. For retailers’ sake, they hope they have demand, but as a consumer, we may find that our merchandise needs may not be able to be met.”
About Karen Videtic
Karen Videtic has taught retail buying, fashion merchandising, advanced store development, management and fashion promotions at VCU for more than 20 years. Videtic’s retail experience extends from department stores to national specialty store chains, in management and fashion promotions, as well as independent consulting on merchandise planning and control. In wholesale, Videtic has assisted several independent manufacturer sales representatives in both the intimate apparel and fine jewelry industries attending New York and Atlanta markets, and she has developed numerous new product lines for national jewelry manufacturers. Videtic has co-authored two textbooks, “Perry’s Department Store: A Retail Buying Simulation,” and, “Perry’s Department Store: A Product Development Simulation.”
Overview and Forecast of the U.S. Labor Market
The United States Department of Labor released a report recently stating that American employers added 165,000 jobs in April, lowering the unemployment rate to 7.5 percent - a four-year low.
VCU Professor Assesses Consumer Confidence with Looming Fiscal Cliff
David Urban, Ph.D., executive associate dean and professor of marketing in the VCU School of Business, said the impending fiscal cliff could prove to have disastrous economic consequences if it is not avoided.
VCU Professor Says Economic Recovery Likely Will be Slow and Difficult
Uncertainty and volatility have gripped financial markets in the United States and likely will reign for years to come as the country struggles to regain its economic footing, according to Cory Bunting, associate director of the Capital Markets Center in the VCU School of Business.
VCU Professor Sees Hope in Developments in Egypt
Van Wood, Ph.D., the Philip Morris Chair of International Business in the VCU School of Business, believes that there are significant reasons to believe that the toppling of the Mubarak regime in Egypt among widespread street protests will result in positive economic developments for both the Arab and Western worlds.
VCU Professor Says Employment Picture Improving Slowly But Problems Loom
Improvements in the employment picture have been slow, but long-term complications are the larger concern, according to Robert Trumble, professor of management and director of the Virginia Labor Studies Center at VCU.
Banking Industry Regulation Carries Both Risks and Rewards, VCU Professor Says
The Obama administration’s proposal to limit the size and risky activity of banks makes sense in its intent, but the current proposal could hamper banks’ economic development capabilities and consumer services, according to Kenneth Daniels, professor of finance at VCU.
VCU Expert Sees Stressful Holiday Retail Season Ahead
Holidays are always a critical time for retailers, but this year’s holiday shopping season looms especially large because of broader economic concerns, according to David Urban, professor of marketing and interim dean of the VCU School of Business.
Key to emerging strong from the recession is innovation, according to VCU expert
Businesses that invest in innovation during the economic recession are most likely to emerge from the downturn the strongest, according to Kenneth Kahn, Ph.D., professor of marketing and director of the da Vinci Center for Innovation in Product Design and Development at VCU.
VCU history professor considers Great Depression causes and lessons learned
This month marks the 80th anniversary of the stock market crash recognized as the start of the Great Depression. And while the Great Depression is best remembered for the economy misery caused worldwide in the 1930s, its root causes happened much earlier according to John T. Kneebone, associate professor, Department of History.
VCU Chair Urges Retailers to Focus on Customer Service
Retail expert David Urban, Ph.D., chair of the Department of Marketing in the VCU School of Business, says that recessions tend to highlight every problem area that a retailer has – from operating inefficiencies to knowledge of their consumers.
Economic Crisis Highlights Risk Management’s Importance to Lifespan of a Business
Risk management is not a flashy business topic – after all, making money is more exciting than saving it. Still, managing risk and avoiding problems is every bit as critical to the health of a business as creating revenue, according to a VCU professor.
VCU Branding Expert Says Businesses Should Display Strength
The economy is limping badly, and many consumers are suffering. Kelly O’Keefe, a branding expert and the executive education director at the VCU Brandcenter, believes businesses have a responsibility to project strength and assume a leadership role in such an uncertain climate. However, most businesses are responding to the crisis with conspicuous trepidation, he says, thereby missing an opportunity to connect with customers.
Job Loss Jitters?
It’s hard not to worry when newspapers, TV newscasts and the Web are filled with stories about layoffs, the stock market, foreclosures and shrinking retirement accounts. Fears about losing a job and paying bills in a declining economy can lead to sleepless nights, but taking action before a potential job loss can help you stay calm and healthy, according to Micah McCreary, Ph.D., a professor in the VCU Department of Psychology.
The Big Three and the Fate of the U.S. Auto Industry
“Things have just fallen apart,” says George Hoffer, professor of economics at VCU and an auto industry researcher for more than 40 years.
Back to top