Retailers Offer All the Frills, at Half the Price

By Christina Cheddar Berk
|  Sunday, Nov 2, 2008  |  Updated 7:49 AM PDT
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Retailers Offer All the Frills, at Half the Price

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Stores, like Hanna Andersson and Janie and Jack, are offering deep discounts on holiday wear for the kiddies.

Already have the kids’ clothes for your holiday pictures?

If you do, you might want to look again because that suit or dress is probably on sale, at a steep discount.

 

When the economy hits a rough patch, as it has now, there are a few things folks take for granted. First, the high-end retailers will hold up, and second, people will still buy for their kids before they buy for themselves.

But many retailers of children’s apparel are already selling their festive holiday dresses and sweaters for as much as half off, and it’s only October.

“Retailers planned for a weak holiday season, and some for a very weak holiday season, but not many planned for the significant cliff drop off that we have seen in September, and which persisted into October,” said Adrienne Tennant, a retail industry analyst at Friedman Billings Ramsey.

Retailers ordered their holiday clothes last spring, long before they began to experience the massive contraction in consumer spending that they are seeing now.

“The real surprise has been the dramatic way in which shoppers just disappeared in September,” she said.

According to Tennant, even those who are making the trip to the mall aren’t necessarily shopping. Many are simply walking around, and won’t spend unless they have a coupon or see a big sale. Retailers are noticing this, and looking to just keep the inventory moving and end the year clean. The result: steep discounts, even on the higher end.

Hanna Andersson, a Portland, Ore., company that sells upscale children’s apparel through its stores and catalog, is currently promoting its holiday dress sale. Dresses from the most fancy to the everyday are half off.

At Gymboree’s (NASDAQ: gymb) Janie and Jack store, a floral silk dress that once sold for $78, is now $47.99, while a rosette velveteen coat has been reduced from $98 to $59.99. Meanwhile, a black velveteen blazer for boys is now selling for $46.39. Originally, it sold for $78.

While it’s true, parents and grandparents will buy for their kids before themselves, they are still looking for good deals, said Ellen Davis, a spokeswoman for the National Retail Federation, an industry trade group.

“A lot of people are trading down to discount and department stores,” Davis said. Specialty stores are attempting to get ahead by offering customers bargains, she said.

“They are saying, ‘We’ve got really good prices too. We have good value,’” Davis said.

Tennant expects consumers will continue to spend proportionally more on their children than they do on themselves, but the high-end is at greater risk during this slowdown because a large number of the lost jobs are happening at higher income levels.

A recent report from BIGresearch showed that consumers are still spending on children’s clothing — in fact, spending is up just slightly from last year — but price is a bigger factor in their decision than it was last year.

 

And consumers are shopping most often at discounters such as Wal-Mart Stores (NYSE: wmt), Kohl's (NYSE: kss), and Target (NYSE: tgt), according to the BIGresearch survey.

Incidentally, if you've already bought holiday clothes for your kids and the retailer has marked them down since your purchase, ask for a refund. It's a buyers market. Retailers want to stay on your good side, so there's a very good chance they'll give you a refund or credit.

Recent Holiday-Central Posts:

  • On Main Street, Shops Partner to Make Registers Ring
  • Holiday Office Parties Expected to Be Lamer Than Usual
  • Wal-Mart Slows New Store Openings, Spiffs Up Old Ones
  • Coach's Holiday Strategy: Sell Like It's 2010
  • Another Kind of Holiday Nostalgia: Layaway
  • Troubled Retailers: Sorry, Santa--We're Closed

Questions? Comments? retaildetail@cnbc.com

For more stories from CNBC, go to cnbc.com.

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