Market Overview

Pricing In Footwear, Apparel Has Decelerated Materially

Pricing In Footwear, Apparel Has Decelerated Materially

Prices of footwear and apparel brands have dropped materially, according to Brean Capital’s branded footwear and apparel price tracker reading that stood at 105.1, versus the last read of 111.2.

Analyst's Take

Analyst Eric Tracy has attributed the decline to promotions in the mid-tier department store channel, only partially offset by slightly better mass channel pricing on slight growth in basics, better trends in denim.

“Athletic apparel pricing remains largely unchanged and is now -8.5 percent since the inception of our study,” Tracy wrote in a note.

Curry Evolution, Holiday Shopping Season

Meanwhile, Tracy continued that Curry evolution supports improved pricing in basketball, while running continues to fall. In addition, the analyst said athletic apparel pricing pressure continues amidst industry consolidation.

Further, the brokerage’s checks show that a warmer start to the holiday selling season and cyclical slowdown in the athletic category have resulted in incremental markdowns in outerwear and heavier product (including heavy sweatshirts/fleece). As such, a cooler weather is critical for strong sales of these products in the fourth quarter.

“Based on slower sell through early in season, we would argue chasing of seasonal product hasn't/likely not happening into holiday, with the chance post-holiday still in play (should weather cooperate, helping to clear through more profitably),” Tracy highlighted.

Brean Capital's Branded Apparel & Footwear Price Tracker is a price-weighted average that details more than 180 SKUs across multiple channels of distribution (mass retail, low-, mid-, high-tier department store, sporting goods and athletic specialty).

The SPDR S&P Retail (ETF) (NYSE: XRT) is up over 11 percent in the last month. Year-to-date, the ETF is up over 8 percent.

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Nov 2015HSBCUpgradesBuy

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