Denim glut
Today on RealMoney.com, they were debating the issue of a denim glut (or bubble). I have to say that I do not get the sense of any glut. From all of the retail conference calls I have been on, it seems that denim is simply selling very well. And most retailers are saying they would have done better to have more of it in the stores.
If these managements were coming on the calls and saying that they made the wrong move by having too much denim, that it didn't sell well, and that they had to be overly promotional to work down bloated denim inventories, then I would be more worried.
But is it at all possible that maybe the retailers got this one right? Maybe they correctly forecasted that denim would be the bestseller, and stocked ample inventory in anticipation of this. I don't think any investment managers want to entertain this notion, and would rather cling to their denim-glut theories.
I am also from the camp that sees a secular shift towards denim and away from slacks. I can tell you that when I lived in Chicago, I always wore "pants" when I went out to dinners, etc. In L.A., there is basically no restauarant that is too nice to wear denim. More than half of the employees in my building wear denim to work every day. My sense is that this is more of a trend than a fad.
posted by J. Kahn @ 12:56 PM
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6 Comments:
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One thing that I've noticed is that the places in my mall (ANF, AEOS, BKE, Express for Men) have all raised their prices on denim this year and are offering discounts, taking things back down to their old price. Example: AEOS jeans were $34.95 at back to school last year with a different sale every week. I was in there last week and they were $40-$45 with $10 off each pair. That seems like an awful lot of pricing power for an alleged glut.
One aspect of this that is dream come true for retailers and manufacturers is the change -- from a generation ago back when I was part of the "youth market" -- of what constituted a new pair of jeans.
Back then when you bought a new pair of Levis or Wranglers they were dark, dark blue and stiff as a board. You washed them a few times before you could even manage to put them on and then you got them dirty and you washed them again and then they got dirty...etc. etc.
Eventually they got broken in but it took a while and a bunch of washings. They were as tough as nails and wore like iron. They lasted forever. I mean years before they really gave out.
Then not that many years ago with the advent of the stone-washed and acid-washed jeans of the 1980s, something marvelous (from a retailer's point of view) happened. People wanted the jeans already broken in -- so they were "pre-washed" which really meant that they were treated with a chemical process to fade and loosen the fabric.
While this did aid the immediate comfort and the fashionability, the process also dramatically reduced their life of of the jeans. A wardrobe item that used to last for years started lasting for months instead. I remember talking to a fellow who ran a small textile mill that manufactured jeans for the big companies. He said it was the biggest shot in the arm that the denim manufacturers had ever seen. Demand shot up not just because of fashion, but also because the jeans just wore out faster.
Heck, with the distressed denim look that seems to be in vogue now, I can't imagine that a pair of jeans is going to last much longer than the weekend. They come already ripped and full of holes. A few wearings and they're liable to just blow away like so much chaff in the wind. Ka-ching for the retailers.
Sort of like the old Dave Barry How to Buy a Computer column:
Step 1 - Buy the computer
Step 2 - Take it home and immediately throw it away since it became obsolete on the drive home.
Buying Jeans:
Step 1 - Buy the pre-destroyed jeans
Step 2 - Wear them
Step 3 - throw them away since they completely fell apart after the first wearing.
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