“The consumer is strengthening and there’s some pent up demand.” That’s the word out of retail trend watcher Merchant Forecast and their senior merchant Jessica Bornn. That opinion jibes with several retail surveys that suggest holiday spending will be higher this year. Gallup found Americans plan to spend $720 on gifts this year, up from $704 in 2013.
The National Retail Foundation says we’ll each spend an average of $804.42, a pop of 5% from their 2013 number.
So with consumers digging deeper into their wallets, which retailers will fill the space under your tree and which will end up with a lump of coal in their stocking?
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Merchant Forecast came up with a list of winners and losers. Among those winners:
Kate Spade (KATE) - Bornn says they are “kind of the 'slow and steady wins the race' handbag company. They’re really growing their brand in a smart and methodical way and if you compare it to some of their competitors, namely Michael Kors (KORS), Kate is really letting the handbags lead the brand and then slowly flowing into other categories. And the strength from the handbags opens the door for apparel, shoes, small leather goods, accessories and it’s actually been working really well at retailers.”
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Ugg (DECK) - Bornn notes they have proven those furry boots are more than a fad and the company itself is more than just those boots. “There’s leather shoes; there’s boots; there’s booties; there’s riding boots.” Bornn notes. “They’ve been able to grow very successfully into men's and kids... They still have primo real estate at all the retailers they sell at. That means the brand is still hot; it’s not just a fad.”
Other winners on the Merchant Forecast list include Old Navy (GPS), Build-A-Bear Workshop (BBW) and Bath & Body Works / Victoria’s Secret (LB)
Related: Walmart results suggest strong holiday shopping season ahead
Still, not all retailers were created equal. The list includes some holiday losers like Aeropostale (ARO), Chico’s / White House Black Market (CHS), Buckle (BKE), Express (EXPR) and...
Ralph Lauren (RL) - “Domestically, Ralph has fallen out of favor with their target customer,” Bornn says. “There’s a lot of people out there, 25, 30 [years old], they don’t know who Ralph is. They don’t know this used to be an aspirational luxury brand.”
Bornn observes that the brand has fallen out of favor with department store shoppers and they rely too heavily on their factory outlets. Coach (COH) has had much the same problem and they’re paying dearly for it.
To add insult to injury, Bornn notes that Ralph Lauren has had a fair amount of “changes within management that we don’t necessarily think are for the positive.”
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