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It is not JC Penney's death)



The second-quarter earnings season is catastrophic for most clothing retailers.

The guilty party is just the fickle US consumer. With consumer spending restrained in recent months – despite a stock market upturn and a low unemployment rate of 3.7% – retailers of all types are sitting on mountains of excess inventory. Now the inventory has to be worked up at profitable prices to make room for the lucrative full-price garment intended for school buyers in August and September.

With this in mind, the retail industry is starting to release results in mid-August, with many revenues coming in, failures in earnings, and a decline in Wall Street earnings prospects.

In fact, investors' nervousness about how bad the retail reporting season might be due to concerns about inventory levels has been impacted Numerous stock prices over the last three months have been severely strained.

Some notable laggards in retail:

Brutal performance, especially in conjunction with a good collapse of the old stock markets.

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The retail sales in clothing stores tend to decline on January after research compiled by Goldman Sachs. According to Goldman's data, apparel sales have been falling every month since March.

The department store area was hit particularly hard by consumers who kept away from the clothing shops and closed the shops on an ongoing basis. The sales went back every month. [19659009] Levi Strauss & Co (LEVI) CEO Chip Bergh alerted the company's earnings a few weeks ago.

"We talked about US wholesale for a long time, and the industry has talked about it. It's a bit like a melting iceberg. The recent bankruptcy of bankruptcies in recent months, and other customers trying to scale down their store space, have been having an increasing impact on us recently, "said Bergh Analysten.

Levi's share fell more than 11% on July 10 after announcing a mixed growth quarter.

Where are the buyers? Source: REUTERS / Brendan McDermid

Goldman believes that declining sales and lower inventory levels have brought inventories to unsatisfactory levels and increased the risk that profit margins will be weaker than expected in the second half of the year. [19659017] "Retail sales have deteriorated in the core clothing year so far, and the category has returned to deflationary price trends. We believe this is partly due to the return to the negative retail business and increased inventory levels in the multi-brand channel. These issues are expected to continue, "adds Goldman Sachs analyst Alexandra Walvis.

Walvis adds: Especially hard holiday and 1H19 period, characterized by persistent traffic declines and execution errors in several banners. This has led to an increase in inventories and an increase in advertising activity, which has been exacerbated by an optimistic spring season. "

With garment warehouse inventories out of date, Walvis believes investors should be wary of the brands that deliver products to space. These names include PVH Corp., Polo Ralph Lauren and Levi Strauss & Co.

Bergh admits that some of Levi's major customers are planning their business more conservatively.

"Customers manage inventory more tightly and the way they do. They pull their budgets together," Bergh said.

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The bloated stocks in the run-up to the beginning of school are the last thing retailers need. The sector continues to be hammered by Amazon, investments to accelerate online shipping, bankruptcies and the need to raise prices due to the US-China trade war are hindering supply chains.

Unfortunately, this is reality At the Trump Stock Exchange, people spend their holidays and new cars instead of a fresh pack of underwear or jeans.


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