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.