Bye-Bye Back-to-School, Hello Christmas

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If the back-to-school season does not improve soon, even Santa Clause won't be able to save the retailers this year.

Consumer spending is credited with making up two-thirds of the nation's GDP, so the two major spending seasons -- back-to-school and Christmas -- are make-or-break for America's retailers, as well as the entire economy. The country's retailers started discounting their wares early this summer as cash-strapped shoppers patiently pressured them into marking down their merchandise.

TheStreet spoke to Wall Street's top retail analysts to get their early reads on back-to-school and (believe it or not) Christmas. Will Santa be the big man on campus? Find out here:


1. "Back-to-school has been extremely aggressive in discounting this year. Retailers entered the season with too much inventory, primarily because they bought it after what they thought was a very solid holiday season last year." -- Eric Beder, associate director of equity research at Brean Murray Carret & Co.

2. "Clothing will see a decline in spending in 2010 as parents continue to hold out on purchasing unnecessary or expensive clothing items, opting for the basics and essentials. Furthermore, apparel companies are expected to aggressively push for market share, meaning sales will be abundant across back-to-school clothing areas. This will be particularly true for the denim category." -- Toon van Beeck, senior analyst at IBISWorld.

3. "Back-to-school 2010 certainly got off to a slow start, but it's been moving later and later every year, stretching into September, at least for teen retailers. That's because kids go to school and see what the cool kids are wearing, then they go out and purchase those fashions." -- Christine Chen, equity research principal, Needham & Co.

4. "Back-to-school results among the teen retailers are a good indicator of where Christmas style trends will ultimately be. Styles don't change much from fall to winter, so the winners become clearer." -- Christine Chen, equity research principal, Needham & Co.

5. "Christmas is not going to save the retailers. The economy is a mess. The consumer is a train wreck. The worst is yet to come." -- Howard Davidowitz, chairman, Davidowitz & Associates

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