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-- call we'll take it well as the second half of 2013 begins retailers are praying that warm weather's gonna bring out more shoppers.
It's -- cold winter and spring had a major impact on retail sales so what can we expect for the second half of the year and retail it.
The second day of our second half set up series Liz -- -- capital senior consumer analyst joins us.
With her outlook and a favorite retail by its good to see him as they had treated far what's your overall take on how the first -- in retail.
-- numbers are still coming in for the second quarter but the first quarter was weak sales came in below plan most of the retailers were able to meet earnings expectations but.
Across the board sales were.
Week we should mention again it's it's that bottom line number that people like at the top line number was not so good that is state they -- their operations to the point where -- had good bottom line numbers.
But that number consumers coming out was not what was expected.
-- well the first quarter was maybe a little misleading we have some unfavorable weather it was colds.
Relative to last year and second quarter as -- to get my gap but at the second quarter is a bit a little bit more normal from a temperature -- -- but I.
His sales trends haven't been great.
That consumers so you know they're still kind of being a little bit tighter with the first strangle.
One of the obvious problems as they don't have that much money in their pocket I mean there you haven't seen their income go up.
As a result in some cases they're dipping into savings in order to buy more that can't go -- much stronger candidate.
Yeah -- a couple of dynamics the income growth has been slow.
-- taxation has been higher and so that's been a dragon and they have been dipping into savings I think.
That's a trend typically you can only see happen for a couple of quarters and then there has to be kind of a comeuppance a little bit so.
Are we getting to that point that tipping point where they can't dip into savings anymore they already have -- savings or near historic lows.
And so I think we are getting to that point to the back -- this is going to be the question can income growth accelerate.
To get consumers.
So how -- retailers prepare.
For less disposable income from consumers.
I think you know they're really controlling inventory there -- once again squeezing the operations and just trying to.
Keep a a tight cap on expenses and inventory.
So that they can mitigate the risk of potentially sluggish sales and who's doing a better job of that which retailers specifically.
Well you know highlight a number of retailers like coach they certainly have had a difficult time on the top line I think that has more to do with handbags and where they are in the cycle.
Maybe some competitive pressures but I think they are doing an excellent job maintaining operating margins.
They've got such a strong brand too that the coach brand.
No matter what shopping mall you go to was one of the strongest there it's right.
Yeah I mean it's a blessing and a curse -- large numbers you know how are they gonna grow that market share in North America.
I think what they're looking at is other areas that they can grow their business and like footwear.
Like Asia like men -- and so you know that's that's their approach in in the face of maybe what may be.
Sluggish top line.
Either way might buy a twenty year old daughter get a summer job that Abercrombie I was a little hesitant because -- see how self addressed.
She says she's doing and that the -- -- -- part of -- so I'm okay with that but you think they're doing great.
Right well actually their top line trends have been a little sluggish but it goes back -- sort of how can they control operations I think.
Abercrombie historically has been bad managing expenses that -- getting better right now they're getting much better they're really focused.
And working on trying to lock down some of these areas -- opportunity focused on margin expansion instead of just driving the top line.
All right I hate to end with a negative but there are a couple of have to be pointed out holes you think -- in for some tough times ahead.
Yeah I mean I think that moderate department store area is just a top space because the value proposition.
For that space has been eroded you're going to the mass channel or you're going to the off price channel.
Or increasing the the online channel for more value more brands more convenience.
And I think that's carving away at their value proposition at the risk gives ticking off my producer did little I don't -- and -- is sour note China.
We're just talking about -- China has this market that could be tremendous.
Any opportunities for retailers in China right now.
Yeah I'm focused on the global growth names and so coach has a big opportunity in China.
Ralph Lauren has a big opportunity in China a couple of companies I'm not recommending.
Such as Tiffany and fossil also have big opportunities.
I think it's companies are taking a measured approach to that market.
And not going too fast but it's it's clearly a huge opportunity for the next decade is done please come back -- is again thanks for having me very much let's.
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