August has barely begun yet stores are filling up with autumn stock up to three weeks earlier than usual, as retailers write off the summer season.
After an outstandingly warm autumn and winter in 2006 and a record-breaking wet summer this year, many retailers are desperate for the new season to lift their sagging like-for-like sales.
On the face of it, the omens do not seem good. While the Bank of England decided to keep interest rates on hold at 5.75% in its August meeting, the full impact of rate rises in January, May and July are only being felt now.
Rising interest rates have left some forecasters downbeat about this autumn. Tim Denison, director of knowledge management at retail research group SPSL, forecasts that customer footfall will be down by 1.5% this August compared with August last year. It will then decrease by a further 0.5 percentage points a month, to as much as 3% below last year's totals come November and December, the crucial pre-Christmas trading period.
"The signs are worrying," says Denison. "The July figures have been salvaged by the Sales, which have driven traffic. But after that, what is there to drive trading? It is difficult to see anything that's going to stimulate traffic.
"So far, consumers have been safe in the knowledge that the houses they are investing in are continuing to rise in value. So people are taking out second mortgages and using that to fund their lifestyles. But that looks as if it is becoming a bit fragile now."
To counteract this uncertainty, retailers are likely to play it safer, sticking with trends that appeal to their core customers.
However, City analysts are stopping short of forecasting a sales meltdown. One said: "Debenhams and Marks & Spencer are probably planning for flat sales or a small rise, while Next is looking at -2% like-for-like."
His views are echoed by Teather & Greenwood director David Stoddart, who believes that across the fashion sector as a whole, like-for-likes will be flat or very slightly up on last year, with the supermarkets and Primark continuing to gain share. He says that the fashion sector will only perform better than this if the weather is favourable and there are some particularly strong trends.
Credit Suisse First Boston analyst Tony Shiret believes the outlook for autumn is not all gloom, partly because of comparisons with recent seasons that have been so unfavourable in terms of weather effects. He says: "There is the outside chance of a consumer meltdown, with further interest rate rises and a collapse in the housing market, but I would want to see more evidence before I believe anything of that sort is happening.
"Clothing is likely to be less discretionary than big-ticket items such as TVs. Although there may be some weakness in menswear, which is normally the first to dip in a downturn in the economic cycle, the normal pattern for Christmas would be 2% to 4% ahead year-on-year, and this year it will probably be more like 2% on clothing.
"Most retailers are probably running with a fairly tight commitment on stock, and if the conditions are no worse than last year then the prospects for trading are reasonable."
Overall trends for autumn 07 are expected to be a subtle evolution of last year's trends, but retailers have their hopes set on some key looks.
John Lewis buying director for fashion Peter Ruis says core trends for this autumn on womenswear include all types of leather, chunky knits and statement coats, with stand-out details such as belts, oversize pockets and buttons. He says wide-legged trousers, and dresses in shift styles and prints are also key.
For men, John Lewis is backing chunky hand knits, outerwear with duffle coat-style buttons, and polka dots, particularly on shirts.
Asos.com design manager Sarah Wilkinson says autumn 07 ranges will be inspired by the 1960s and 1980s. "The 1980s will be key for our younger shoppers, with cleaner silhouettes, tone-on-tone embellishment and coloured metallics," she says. "For our more fashion-focused customer, we'll see a nod to the 1960s, including tailored shorts, bib-fronted blouses, Peter Pan collars and pussy-bow detailing."
Peacocks buying and merchandising director Jane McNally is optimistic about autumn. She says: "From a commercial perspective the run-up to Christmas looks promising because day-to-evening jewelled embellishment and sequin tops are already working well and will just get stronger. Denim is back on trend across all ages and genders."
THE FIGURES TO WATCH
- September 12: Next, interim results. The retailer is likely to be quizzed by the City over expectations for its much-anticipated autumn collection upon which it is pinning its hopes.
- September 18: Debenhams, pre-close statement. With Baugur ruling out any immediate interest in the company, the struggling department store chain will be hoping to show some signs of a reversal as shares continue to slip.
- September 27: Moss Bros, interim results for six months to July 28, current trading for first 10 weeks of second half. Will the menswear staple be able to sustain its recent improvement in form in the face of tough trading and increasing rents and rates?
- September 28: Monsoon, AGM statement for 17 weeks to September 22. After a profits crash for the year to May, the womenswear retailer will be hoping that performance over the late summer and early autumn trends are more in its favour.
- October 2: Tesco, interim results for 26 weeks to August 25. With non-food sales slowing and interest rate rises biting, will Tesco come out top in the battle for supermarket clothing spend?
- October 10: N Brown, interim results for 26 weeks to end of August. Expanded catalogues and mid-season mailings have helped push sales up 11.1% for 20 weeks to July. With online spend continuing to grow, the company should be well placed for a good turnout, despite poor summer weather.
- November 6: Marks & Spencer, first-half results/second-quarter trading. M&S says its transitional and autumn ranges will be a big hit, raising expectations for a healthy rise in like-for-likes.
Note: All details to be confirmed.