Friday, January 4, 2008

Quote Of the Day

“It’s as if consumers feel they’re doing something wrong
if they spend money,’’ said Lou Amendola, Brooks Brothers’
chief merchandising officer. “They’re almost afraid to
spend. That’s what concerns me — this guilt factor.”

The fall season was a let down to stores because people were penny pinchers more than ever since the economy has been in disarray. Sales has been going on since October because of anxiety since people weren't their normal spending self. The sales are expected to last through the first quarter to encourage consumer to spend.

What is stopping you from spending? I feel like my income has been the same and the prices do not make a difference to me. But I guess where the money really are, are the middle price merchandises and the middle class is feeling the burn of their investments so they can't easily spend $2000 on handbags per week anymore.

What's interesting is that the price can't really be lowered because of the online industry. If sales are big in the US, are most of the consumer out of the country, especially those in Europe since the dollar is weaker? The only resolution for department store is to have a lower-mark up than they normally do, but that'll mean less revenue, which means less net income, which means they won't hit their mark and goal, which means for the next season, department stores are going to play even more safe by buying less merchandise and not going through with orders until they get a feel as to how the market is going.

Another point to talk about is that the middle-price brand are the one that's having anxiety attack. The high end market has consumers because that upper class will always have some spending room to spend on what they like, no matter the price. The other class, middle and lower are more hesistant in spending a lot so they're targeting the more affordable brand, which is why Gap and Aeropostal are showing positive gains in their stocks.

I say buy if you have the money! ;] What's a couple hundred grands down the drain if you still have a few million? Or what's a couple thousands down the drain when you still have a million?

Source: wwd.com

1 comment:

Tabitha said...

wow i had no idea that people were being cheap this year. what the hell is happening?