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Rotation to Dressier Fashion Was Q1 Key for Winning Retailers

Getting the fashion trend spot on can make or break a retailer’s sales.

That was evident in the first quarter when retailers that made the right fashion choices saw sales climb. Companies focusing on dressier options and style suited for the new office wardrobe performed well.

Retailers such as J.Jill and Oxford Industries seem to have gotten it right.

J.Jill swung back to the black, posting net income of $14.4 million, or $1.02 a diluted share, against last year’s net loss of $18.3 million, or $1.89. Net sales rose 21.7 percent to $1.57.1 million from $129.1 million, while total comparable sales, including comparable store and direct-to-consumer sales, gaining 23.7 percent.

“Our performance was the result of our ability to execute against our disciplined operating model, focused on inventory management, full price selling and flowing newness. Our loyal and engaged customer base responded well to our assortment and our position is more relevant than ever as consumers continue to trend toward a premium casual lifestyle,” president and CEO Claire Spofford told investors during a conference call on Wednesday.

Customers “extremely receptive to the newness we flowed regularly and continued to purchase at full price. Woven tops and dresses were the two standout categories that she responded best to as she began to travel, attend occasions and shop for work again,” Spofford said. “These novelty fashion categories also had the highest AUR (average unit retail) increases in the quarter but saw no price resistance. Once she saw something she likes, she bought it.”

J.Jill’s customer has an average household income of $150,000-plus. Because she’s an older consumer, “her discretionary dollars are her own to spend with children out of the home,” Spofford said.

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J.Jill has four sub-brands, Core, Pure Jill, Wearever and FIT, each with a different design ethos offering a mix of casual and refined apparel options.

“Whether she’s buying versatile work, comfortable travel or premium casual clothes for attending occasions or meeting with friends, we offer her a variety for all of her different usage occasions,” Spofford said. “We have a fabric first approach to design, leveraging premium fabrications across our balanced assortment of key franchises. We also have coverage of extended sizes, allowing us to meet the needs of a broad sector of customers.”

At Oxford, net earnings more than doubled to $57.4 million from $28.5 million. Total sales jumped 33 percent to $352.6 million from $265.8 million across its businesses, which include Tommy Bahama, Lilly Pulitzer and the emerging brands umbrella that includes Southern Tide, The Beaufort Bonnet Co. and Duck Head.

“From a product perspective, we are rolling out new offerings to capitalize on consumers’ return to social events, leisure travel, and even the more casually-attired post-pandemic physical workplace,” Oxford CEO Tom Chubb said. “Tommy Bahama is winning and gaining share through women’s apparel. The category continues to grow faster than even our men’s business with particular strength in dresses and swim.”

Lilly Pulitzer leaned into the “social dressing category, as weddings and special events are back in full swing,” he said. Machine washable Lagoon Linen and the Luxletic, an active-focused offering, are key to fabric platforms such as Meryl Nylon and Fairway Performance Twill, categories driving higher price tiers, Chubb said.

“On the distribution front, our mix among our brands continues to shift towards higher margin direct-to-consumer channels, which comprise a larger portion of our total revenue than they did prior to the pandemic. While direct-to-consumer continues to grow at a faster pace and is by far the largest part of our business, our wholesale business is very healthy and poised to grow at a modest rate over the coming years,” Chubb said.

He expects retailers will start using promotions more frequently again, although Oxford was just as “non-promotional as we’ve ever been.”

Retailers that had the right apparel merchandise saw strong sales. Dillard’s Inc. said its fashion sales did well across men’s, women’s and children’s, fueling a 21 percent jump in sales for the quarter. “Positive customer response to the company’s merchandise assortment combined with inventory management” led to a decrease in first-quarter markdowns, in turn helping with its margins.

Express Inc. saw net sales rise 30 percent to $450.8 million, helping the specialty retailer narrow its quarterly loss to $11.9 million from a net loss of $45.7 million in the year-ago period.

“We’ve gotten our fashion right,” Matt Moellering, president and chief operating officer, told investors in a conference call last month. The retailer has been fine-tuning its assortment, focusing on fit and fabrication, as well as updating styling.

“When you get the fashion right, there’s very little price sensitivity. Secondly, we have added significant quality back into our products. And because we have done that, we’re able to compete on value and not simply price with commodity-type items,” Moellering said.

In contrast was Kohl’s, which is marketing itself as the destination for a casual lifestyle. And while it went big in the dress category in the first quarter, according to CEO Michelle Gass, sales in the core women’s business, core sportswear, casual and career wear were down 1 percent, while children’s apparel fell 12 percent.