As Americans splurge on dressing up again, retailers like Macy’s and
A Nordstrom employee fixes a floral dress on a mannequin in one of the retailer’s department stores.
Ben Nelms | Bloomberg | Getty Images
Out with sweatpants, in with blazers, lipstick and eye-popping prints on dresses.
Americans are sprucing up their wardrobes and spending more on dressier clothing, makeup and accessories as they start going out more and venturing back to offices. The trend is particularly pronounced among higher-income shoppers who are eager to splurge on such items again, even amid soaring inflation and an uncertain economy, analysts and company executives say.
“The masks are coming off,” said Macy’s Chief Executive Officer Jeff Gennette after the company boosted its profit outlook and stood by its sales guidance for the year on Thursday.
The sentiment was echoed by a string of other retailers reporting quarterly results this week, including makeup-and-beauty products chain Ulta Beauty and Anthropologie-parent company Urban Outfitters. People are paying to look their best as they leave the house again, they said.
The latest round of results offer a more nuanced look at the economy after two of the biggest retailers —Walmart and Target — sent shock waves across the market with downbeat forecasts and warnings that some shoppers are becoming more price sensitive amid decades-high inflation.
Rising prices for food and gas are pinching lower-income Americans who are pulling back on spending, executives say. But so far, even the threat of a possible recession isn’t stopping higher-income consumers from spending on items they missed during the earlier days of the pandemic.
‘Head-to-toe color suits’
At Macy’s, Gennette said shoppers are increasingly spending “hours” browsing in stores, especially in urban markets like New York. A year ago, he said people were more likely to get in and out.
“The luxury customer is back in a big way,” he said in a phone interview.
But Gennette noted that shoppers who make less than $75,000 a year are seeking out more discounts.
The split in behaviors also appears to be playing out at Urban Outfitters. The company’s Anthropologie chain, which is known for playful dresses and caters to higher-income consumers, saw sales surge 18% in the quarter. At its namesake chain, which caters to younger shoppers in their first or second jobs, sales rose just 1%.
“There is a sort of bifurcation that has happened,” said Urban Outfitters CEO Richard Hayne on conference call Tuesday evening.
But even shoppers who are trying to economize might be willing to shell out for items like shirts or purses they covet — especially if they think a store might be running low on stock, according to one retail expert.
“It’s a mindset. It’s a psychology: ‘I want to go do things and I need new stuff to wear’,” Jan Kniffen, CEO of retail consultancy J Rogers Kniffen Worldwide, said in an interview on CNBC’s “Squawk Box” this week.
Kniffen said people are more likely to try and save on groceries, where cheaper options might not be that…
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