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Few signs of relief for US apparel retailers

Warnings from apparel maker Perry Ellis and other companies suggest teens and other shoppers are still ho-hum about spending on fashion and that investors should be cautious, especially about mall-dependent retailers.

Teens are spending more time on devices and less at the mall; consumers are increasingly willing to buy clothes online, often from internet-only stores, and consumers in general have shifted their priorities away from clothing and toward technology and home improvement. Wall Street analysts on average expect several months of falling or barely-growing revenues from Gap, American Eagle Outfitters and other mall mainstays. They see a glimmer of hope at year end, with shoppers potentially buying more winter attire than in 2015, when the weather was mild in parts of the United States.

With the propagation of privately held fashion ecommerce stores like Everlane and ShopBop competing with Amazon, as well as more customer-friendly shipping policies from traditional retailers, clothing and accessories outsold computer gear online for the first time last year, reaching $17.2 billion in the fourth quarter, according to comScore.

Shares of apparel retailers have performed poorly. Aeropostale has lost 93 per cent in the past year and recently warned of potential liquidity problems. Shares of L Brands, the owner of Victoria Secrets, are down 12 per cent so far in 2016, missing out on much of a stock market rally since mid-February.

 
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