While still robust, U.S. denim apparel imports slowed their rapid pace in July as brands and retailers balance inventories and deal with a general slowdown in consumer demand.
Jeans imports processed at U.S. ports of entry increased 34.88 percent for the year through July compared to the same period in 2021 to $2.45 billion, according to the Commerce Department’s Office of Textiles & Apparel (OTEXA). This was below the 42.63 percent gain in the first half of the year.
The pullback in consumer discretionary spending and return to markdowns drove denim powerhouse American Eagle Outfitters (AEO) to a $42.5 million second-quarter net loss.
Total ending inventory rose 36 percent to $687 million, with American Eagle and Aerie each driving about half of the increase. Ending second-quarter inventory consisted of current back-to-school and fall merchandise and the company said it was working to align inventories according to demand trends. Third quarter ending inventory is projected to be up in the mid-single digits, with fourth quarter inventory expected to be down year-on-year.
“As we make the transition into new denim silhouettes and fashion trends and bottoms, we see an opportunity to better allocate our investments,” Jennifer Foyle, president and executive director for AE and Aerie, said on an earnings call. “We are also pleased to see the supply chain begin to normalize. This is creating better inventory flows, shorter lead times and enables us to reestablish our best-in-class ‘test and chase’ practice.”
OTEXA’s July report revealed that the Top 10 suppliers all posted significant import gains, but below the first-half pace. For example, the No. 1 producer for the U.S. market, Bangladesh, saw its shipments rise a year-over-year 46.6 percent to $531.23 million in the seven-month period, compared to a 57.06 percent first-half gain.
Similarly, imports from No. 2 supplier Mexico increased 21.9 percent in the period to $430.23 million, off from the 26.46 percent rise in the first six months of the year.
Among the Asian top tier producers, imports from Pakistan–prior to the devastating floods that threaten to dampen denim supply chains–rose 52.38 percent year to date through July over 2021 to $287.9 million, while shipments were up 33.99 percent to $267.65 million from Vietnam, 17.27 percent to $225.57 million from China, 44.91 percent to $122.1 million from Cambodia and 102.31 percent to $43.56 million from India.
Rounding out the Top 10 were Egypt, with a 94.03 percent hike to $140.77 million; Nicaragua’s 33.27 percent increase to $85.57 million and Turkey’s 33.9 percent gain to $46.42 million.
Blue denim apparel imports from the Western Hemisphere overall were up 25.68 percent in the period to $562.59 million. Inclusive of that was a 34.27 percent increase in imports from Central American Free Trade Agreement countries to $103.27 million.