MARKETS SPECTATOR: Cold shoulder

Citigroup's Craig Woolford says apparel sales are disappointing for winter 2013, with fashion trends failing to catch.

Winter apparel sales have been made inglorious by summer’s sun. Citigroup analyst Craig Woolford says retailers’ share price may slide if concerns build about winter inventories.

“Winter fashion trends are failing to inspire shoppers,” says Woolford, head of consumer research at Citi. “This winter, black is prolific and the style is more masculine, which are attributes that certainly do not appeal to all shoppers. This season is a stark contrast to summer 2012, where the bright colours boosted sales. As a result, we expect like-for-like sales to slow for the clothing sector.”

Citi’s intelligence is that sales at David Jones are weakest. Moreover, David Jones and Myer are showing an aversion to discounts. That may reduce ‘foot traffic’ and sales, says Woolford. Moreover, temperatures were higher than average, dampening demand for winter clothes. In March temperatures were 1.5 degrees warmer across capital cities. April was 0.2 degrees warmer. Heavy winter jackets may not be needed.

Woolford has a 'sell' rating on David Jones and Premier Investments. It now has a 'neutral' rating on Myer. Citi has a 'buy' on Pacific Brands and Specialty Fashion Group.