California Apparel News

When retail sales for the 2014 holiday season fell short of forecasts, many industry watchers declared the crucial shopping season a disappointment, but recent research indicates the season may have been better than first reported—and more good news may be on the way.

According to the National Retail Federation, the 2014 holiday season saw retail sales increase by 4 percent, slightly missing forecasts of 4.1 percent.

But Ken Perkins of Boston-area market-research company Research Metrics said the retail results for the entire fourth quarter paint a much more encouraging picture.

“Retailers look to have turned in their best holiday sales growth in three years during the fourth quarter,” he wrote in a Jan. 26 research note.

He forecast that fourth-quarter earnings for the 123 retailers in his Retail Metrics Earnings Index will rise 8.4 percent to 13.5 percent in year-over-year earnings. For his index, it will be the highest quarterly earnings growth since the first quarter of 2012, when earnings increased 12.2 percent.

Perkins’ forecast seems to concur with comments from Jack Kleinhenz, the NRF’s chief economist, who said the U.S. economy is strong. “Holiday sales in 2014 are the best we’ve seen since 2011,” he said after results for holiday 2014 sales were released on Jan. 14.

The economy has been improving because gas prices have been relatively low and the employment rate dropped to 5.6 percent in December, which is the lowest it has been since the first half of 2008, according to the U.S. Bureau of Labor Statistics.

The first big consumer holiday of 2015 also is forecast to be strong, according to the NRF. People celebrating Valentine’s Day will spend $142.31 on flowers, sweets and apparel—more than they spent last year, which was $133.91. Total spending for the holiday is expected to reach $18.9 billion, including $2 billion forecast to be spent on apparel during the holiday for lovers, said Michael Shay, NRF president and chief executive officer.

“It’s encouraging to see consumers show interest in spending on gifts and Valentine’s Day–related merchandise—a good sign for consumer sentiment as we head into 2015,” he said.

For lingerie shops such as Risqué in Pasadena, Calif., Valentine’s Day is like Black Friday. It is one of the year’s most important days for business, said Ellen Sepulveda, owner of the shop.

“If you are a lingerie boutique and if you are not selling a lot of lingerie during Valentine’s Day, what are you doing? It’s your time to shine,” she said.

This year Valentine’s Day is expected to be especially sweet. It falls on a Saturday, which gives people a weekend day to shop for the holiday, Sepulveda said.