It looks like kids will get clothes for Christmas this year, and there could be some lingerie for mom under the tree, too.

Apparel is making a comeback on gift lists this holiday, since there is little else to excite shoppers, say the experts.

"We might just see fashion come back into fashion as a holiday gift," said Marshal Cohen, chief industry analyst of market research firm NPD Group. The firm's research found 49 percent of shoppers will give apparel as a gift, making it the most popular category. Cohen singled out jeans and graphic t-shirts as two popular items.
That's a sharp contrast with last year, when retailers had to slash prices drastically to move excess inventory, especially in apparel. There won't be much of that this year, because retailers have trimmed inventory, said Cohen.

Leslie Wexner, CEO of Limited Brands (LTD), is clearly banking that some of those gifts will be underwear. Wexner told analysts the parent of Victoria's Secret is getting its "mojo" back this holiday.

Sales were in free fall this time last year; "It was really the pits," Wexner said, according to The Columbus Dispatch. Now, he says he's optimistic about this holiday.

Limited boosted its forecast to expect either a break even next quarter, or a loss of up to four cents per share. That's better than the seven- to 12-cent loss it expected before.

Cost-cutting brought the company back from the brink and Victoria's Secret is speeding up delivery of its more popular lingerie products to keep inventories low, but avoid getting caught short of demand, Wexner told investors.

The fear of running out of inventory has surfaced in recent weeks, as consumer demand seemed to perk up while stores keep boasting lean inventories.

Cohen doubts either shortages or major markdowns are likely, but says it's hard to predict because shoppers are getting used to last-minute holiday shopping. And a lot of those jeans and t-shirts will be bought in January with gift cards, he added.

Cohen predicts there will be the same number of discounts as last year, but not the same deep, 80-and-90-percent off panic deals.

"It's this vicious cycle of who's going to blink first," he says. "And every year for the last decade, the retailer has blinked before the consumer."

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