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IBM Forecast: Fall Looking Bright for Apparel Retailers

Eleven percent surge in children's apparel sales lead broad-based increases for August through October

ARMONK, N.Y., - 02 Sep 2011: Apparel sales are expected to post year-over-year gains during the fall shopping season, with especially big increases in sales of children's apparel, according to an analytics-based forecast produced by IBM (NYSE: IBM). The findings have substantial ramifications for retailers preparing for one of their most important seasons of the year.

The forecast relies on historical data and sophisticated analytics software developed by IBM to analyze both long-term trends and seasonal peaks. IBM consultants use these predictive techniques to help retailers, manufacturers and other IBM clients improve performance by addressing complex issues of supply and demand. These techniques also aid in planning product mix and new store locations. In producing the forecast, IBM applies analytics technology to economic data gathered by the U.S. Census Bureau.

The children's apparel category stands out during this three-month period.  It is expected to total $2.659 billion, representing a 11.1% increase over the prior-year period. Women's apparel, men's apparel and footwear are all expected to post increases over the same period last year as well.

The sales projections for August, September and October 2011 are in the following chart (numbers in millions of dollars):

2011

(Forecast)

August

Sept.

Oct.

Total

Women's Apparel

3004

3044

3163

9211

Men's Apparel

597

638

695

1930

Children's Apparel

904

886

869

2659

Footwear

2818

2083

2165

7066

The following chart contains actual sales figures for August, September and October 2010 (numbers in millions of dollars):

2010

August

Sept .

Oct.

Total

Women's Apparel

2875

2957

3100

8932

Men's Apparel

551

601

678

1830

Children's Apparel

816

797

781

2394

Footwear

2727

2019

2100

6846

The projected year-over-year change in sales for the three-month period is summarized below:

Projected year-over-year change in sales for August-October:

Women's apparel

3.1%

Men's apparel

5.5%

Children's apparel

11.1%

Footwear

3.2%

Category rotation

The forecast indicates that for Men's Apparel, September sales will be up 10.5% over the 20-year average. For Women's Apparel, September sales will be up 2.15% over the 20-year average.

"This indicates that consumers are rotating between categories," said IBM retail analytics leader Michael Haydock. "Adults are holding back on purchasing for themselves during their back-to-school shopping for the kids. But once the kids are in school, moms and dads will be looking to treat themselves. This category rotation, which became prominent after the economic downturn began in 2008, seems to be persisting."

He noted that it is important for retailers to understand these trends and adjust advertising, staffing and inventory accordingly to meet fast-changing demand.  

Haydock also noted that disposable income, as reported by the U.S. Commerce Department, continues to be healthy this year, perhaps indicating pent-up consumer demand.

For more information, visit www.ibm.com/gbs/bao.

Contact(s) information

John Buscemi
IBM Media Relations
914-766-2607
jbuscemi@us.ibm.com

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