We’ve been spying earlier-than-usual markdowns this spring into summer season, from department stores to luxury apparel, leading into the usual holiday sales.  And now, as we approach the July 4th weekend, the reductions are even more pronounced (and they were started over a week ago, in many cases).  Despite strong apparel trends, there was lackluster selling at the counter, coupled with late deliveries due to the West-Coast port strikes earlier this year. In fact, we saw 50% off at Gucci in late May due to late deliveries of Spring-3 merchandise leading into early summer deliveries. It is imperative that retailers and luxury brands liquidate their spring merchandise in order to prep for the more important fall season.  The erosion of margins due to a shorter full-price sales weeks was evident in Q1 earnings, and we expect fallout from these circumstances continued until back-to-school season which kicks off in a few weeks. We’re tracking promotional activity and will keep watching for continued pressure on sales.

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