E.U. Clothing Retail Sales in February 2009 (Monthly Report) - Emerging Textiles

E.U. Official Statistics. UK and German Retail Sales Data

E.U. Clothing Retail Sales in February 2009 Monthly Report

8 April 2009

Clothing consumption was especially bad in the European Union in February, according to first available data. Rising unemployment is depressing retail sales in largest countries. Spending even fell nearly 15% in France from a year earlier. UK retailer Next predicted a sharp drop in comparable retail sales in the first half while H&M unveiled its first quarterly losses in five years.

Retail sales deteriorated in the European Union in the second month of the year, the EU statistical office Eurostat this week reported.

Overall retail sales were down 1.2% from the previous month in volume terms (data at constant prices and seasonally adjusted) while losing 3.4% from February 2008.

If excluding food items, the decline even reached 1.5% from the previous month and 3% from the same month in the previous year.

Clothing retail sales data are not yet available but they are expected sharply declining, compared with a surprising surge of 4.7% observed in January (including sales of shoes).

Sharp Drop in France

The first data of the three largest European markets are indicating a serious decrease in clothing retail sales.

In France for instance, February sales of textiles and clothing were down 14.8% from the same month in 2008, according to the I.F.M. (Institut Français de la Mode - French Fashion Institute).

Retail sales had however sharply risen in February 2008, with winter sales ending later and therefore making any comparison more difficult.

Rising unemployment is everywhere depressing clothing retail sales in the European Union.

Historical Decline in the UK

UK data are indicating a fall of 2.20% in February clothing sales from a year ago, the largest decline in a large number of years.

UK second largest clothing retailer Next made it clear the first half of the year will be very difficult.

Next's comparable retail sales could be down between 6% and 9% as a consequence.

Consumption should be stronger in the second part of the year, as lower food prices and mortgage rates will possibly stimulate clothing retail sales.

UK retailers will however be forced raising their prices for the Autumn-Winter season, after the Sterling sharply dropped in the last months of 2008.

This could further depress retail sales, as a result.

Difficult First Half

The same experience may be shared to a lesser extent by continental retailers after the euro heavily fell last year against the US dollar.

Leading European retailer H&M reported a 8% drop in comparable retail sales in February, the worst performance since last April when sales had surprisingly fallen 10% at stores opened at least a year earlier.

H&M also reported the first drop in its quarterly net profit in more than five years.

With unemployment expected further rising in major economies and European governments often very shy with their bailout plans, clothing consumption should not rebound in the near term.