After Long Winter Will March Be a 'Lost Month' For Retailers?

Cold Weather Is Bad News for Apparel Brands, Especially as They Face Tough Comparisons With Last Year's Mild Spring

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As spring breakers descended on Florida last week, they were met with near-record levels of cold. Indeed, across the country from New York to Atlanta to Denver, temperatures were well below normal and much of the Midwest was blanketed in snow during the first official days of spring.

It's been a rude introduction to the spring selling season for retailers, which a year ago saw sales jump, thanks to the warmest March in more than 100 years.

It sure didn't feel like spring last week in Washington, D.C.
It sure didn't feel like spring last week in Washington, D.C. Credit: Bloomberg News

"For most businesses, spring sprung early in 2012, providing a great start to the season with strong traffic and increased opportunities to move more of their seasonal inventories at regular-price levels," said David Frieberg, VP-marketing at Planalytics, which offers weather intelligence. "Coming into March, many retailers were up against extremely difficult comps that, without similarly favorable weather, would be tough to match. The weather did not repeat itself, and as a result, many retailers will be reporting a difficult month."

The International Council of Shopping Centers reported sales ending March 23 fell 1.7% and lowered its expectations for the month. "An abnormally cold bout of weather in the eastern two-thirds of the country brought a chill to consumers and their interest in spring goods -- especially apparel," said Michael Niemira, VP-research and chief economist for the group.

Richard Jaffe, an analyst with Stifel Nicolaus, last week trimmed quarterly and annual sales estimates for major retailers including American Eagle, Aeropostale, Gap and Kohl's, citing the unseasonably cold and wet weather. Both the Easter and spring-break shopping periods will likely be lost, he said, as consumers continue to wear cold-weather clothing and bypass lightweight spring fashions. For that reason, Mr. Jaffe suspects retailers catering to teens and children will be hardest hit.

"March is a bit of a lost month for retailers," Mr. Jaffe said. "In April, they'll make every effort to catch up, but I don't think they'll fully catch up. They will have to take markdowns."

Marketers are doing their best to be relevant in their communications with winter-weary consumers, though much of the marketing plan is locked in well in advance.

Edie Kissko, a Gap Inc. spokeswoman, said the retailer's brands, which include Gap, Old Navy and Banana Republic, regularly adjust marketing through digital and social channels in response to shifts in the weather. At Gap, for example, the brand is seeking to balance product messages with lifestyle content that's not specific to the season. Styling has also been adjusted in stores and on its website and Pinterest pages.

"It's tough to react that quickly," said Mike Gatti, a senior VP at the National Retail Federation. "It could be a missed opportunity, but part of the challenge is what's left in stores. Winter has dragged on so long at this point, there probably aren't any snow shovels left, and who knows what winter-coat stock looks like?"

Spring also can't come early enough for car dealers in the Northeast.

Staluppi Auto Group on Long Island has 10 dealerships, out of the group's 26, that were in Hurricane Sandy's path. Adding insult to injury, the dealerships struggled with snow this past winter. Snowstorms, said John Staluppi Sr., the group's co-CEO, can bring costs that are never recovered.

Because some of the group's dealerships are jammed into small locations, "there's no place to push the snow," he said. So the company owns two "snow melters," said Mr. Staluppi. "They cost $350,000 apiece, and we put the snow in these things and we melt it.

"When we get a snowstorm out here, it costs us over a million dollars a day between lost revenue and removing the snow," he said.

Contributing: Automotive News

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