Textile trade Christmas sales will be weak and little promotion

São Paulo-not even Christmas, most important date of the year for retailers, will be enough to reverse the negative results of the sector. The projections of entities heard by DCI vary between stability and 11% drop in sales for the period, which will cause the stock buying decisions and promotions are conservative.
According to the Executive Director of Brazilian Textile retail Association (Abvtex), Edmund Lima, discounts will not be a strategy of the companies this year. "The promotions impact much on profit margin, and the companies are just in the process of seeking to increase it," he says. The entity represents the largest networks, among them: Renner, C&A, Cia. Hering, Marisa, Riachuelo and Zara.
The opinion is shared by the Chief member of the Brazilian Institute of Retail executives and Consumer Market (Ibevar), Nuno Souto, who claims that both retail as the industry are in a moment of trying to retrieve the margin. "If they do it [give many discounts] harm enough results," he says. He complements which companies should work with the communication, and sell the idea that they are offering products with a good price ".
Both entities believe that sales of the period will be the same as last year. The National Confederation of trade in goods, services and tourism (CNC), on the other hand, projects a significant fall in sales of clothing stores in the month of December this year, which should be more than 11%. "From the point of view of the sales volume, the negative variation recorded in 2015 ( -5.4%) is expected to be even higher this year," says the Economic Advisor, Juliana Serapio.
Vision of retailers
The predictions of the three entities seem to reflect the mood of retailers, which also look for Christmas with low expectations. The lingerie store Hope, for example, says that if sales are equal to the last year it will be a positive outcome. In 2015, they dropped by 1.5% on the date, year-to-year comparison.
Over the last few months, the expansion Director, Silvio Korytowski, says that in September the result was very bad, with a fall of 6%. Already the month of October has been showing an improvement, he said. The Rabusch, who sells women''s fashion articles, States that the prospect is a high of 6% to 10%, in nominal terms-which would represent a decline or stability if considered the effects of inflation.
According to the Director of the network, Cristiano Seidert, the bet of the company for the Christmas period will be the expansion of the mix. "We''re not working with promotions for Christmas, but with releases and a greater variety of products," says, that the increase will be focused on two fronts: the items with prices (and have a whirl), and plus size products. "At Christmas, the demand for these products with input prices grows enough. So we will have a wider range of these items, for the conversion of the client to be more assertive, "he says.
The Hope, which has 162 operations, also says it should not invest in discounts, and punctual actions to attract the consumer and stimuli for sellers, as an extra for those who beat the goal. "As the consumer flow has slowed enough with the crisis, we want to compensate by increasing the conversion rate," says Korytowski.
In addition, the retailer did earlier this year a reformulation in stock. "Decrease rows, with fewer releases, but we''re working with more depth, concentrating on products with a higher spin," he says. "So, we can have a balance in the quality of the stock, and a healthier cash flow."
Against the two companies, the menswear retailer Sketch says the promotions and discounts will be a bet for the month of December. "Let''s focus on those actions in input products such as shirts, polos, which has great appeal as a gift," says the Director of the company''s expansion, Fabio Long.
'' Fast fashion ''
The network hopes for Christmas an expansion of about 20% in sales compared to last year. According to Long, the good result that the company has been showing is due, among other reasons, to the fact the company work with the fast fashion model, and operate with own manufacturing.
"Because we have some factories our, that facilitates management of the cost. I understand the variation of the market and produce only what I need [lossless], which carries also a better margin, "he says.
The advantage of fast fashion, he said, is that there is no risk of getting overset shopkeeper merchandise and, consequently, the capital stopped. "My franchisee does not need to invest in large stocks, he buys only what it needs, according to sales. Is a jail where the stock is dry and there is no risk to the stationary products ", explains.
The Rabusch also works with the template and States that reruns are weekly and according to the demand of each store. As well as the Sketch, part of the production is also own. "60% of our manufacturing is internal. The other 40% is done by other industries, of which only 5% is imported, "says the Director of the network, long.
For Shakira, the Ibevar, the model is a great opportunity for retailers. "The fast fashion enables companies to come out better in a positive moment and mitigate the drop in crisis scenarios. But it requires a very great professionalism, "he says.