Clothing stores feel sharp economic pinch

But a change in approach may not solve some longer-term problems nagging clothing sellers, including overexpansion. Flickinger estimates that American retailers overall have been adding more than 1 million square feet of new selling space every year for the past 10 years, with some paying dearly for prime real estate during the recent boom years. Now some clothing companies are finding they just don’t have enough demand for all those outlets, and Flickinger expects many will be forced to scale back.

“It’s just too many stores with too much square footage chasing too few shoppers,” Flickinger said.

Flickinger also blames retailers for getting too greedy with their store-branded credit cards, hiking interest rates for profits that, he believes, are now hurting the retailers because consumers don’t have as much money to buy new clothes when they are still paying dearly for their older ones.

The jury is still out on how long Americans can go without the latest must-have shirt or new seasonal jacket. Beemer isn’t expecting discretionary spending on things like clothes to really bounce back until May 2009, after next year’s tax refunds start to kick in.

“I’ve done research for 29 years, and what I’m seeing today I can’t compare to anything I’ve seen before,” he said.

In the meantime, he expects to continue to see shoppers pull back even during times when they traditionally shop. Last year, he noted, 16 percent of people he surveyed said they didn’t do any back-to-school shopping at all. Beemer thinks they instead waited until the holidays and provided their kids with the clothes as gifts.

Flickinger thinks more Americans will make better use of hand-me-downs and secondhand stores. If there’s one bright spot for clothing stores, he said it’s that Americans’ thickening waist lines are driving some sales as more adults find their clothes growing increasingly snug.

“The only thing that, ironically, is saving the fashion industry is obesity in America,” Flickinger said.

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