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US brands see better times

The past two years have been rough for a number of big US clothing and footwear brands.
Many have regularly struggled to sell the inventory they’ve made, and have fallen back on heavy and endless discounts—sinking their profits. They’ve had to contend with a string of bankruptcies among some of their largest retail partners, along with high-profile store shuttering. Shoppers, meanwhile, are spending less of their money on clothes and seem to only want to buy on sale.

But there are indications that better times lie ahead.

Brands are finally starting to get their inventories under control, which means less need for markdowns. At the same time, returns from investment in direct-to-consumer and international sales are starting to roll in. A weakening dollar is making these companies’ products more affordable overseas. New products and innovations are set to hit the marketplace and the retail situation overall is improving.

Emerging markets, and China in particular, will continue to be a source of growth not only because greater economic expansion helps fuel branded apparel purchases, but also US brands remain relatively underpenetrated, leaving significant white space for growth.

However all this assumes the US puts no tariffs on Chinese imports and that there is no spike in the cost of cotton or the value of the dollar.

 
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