Shoppers may be thinking about spring, but some retailers are reluctantly setting their sights on Christmas.
Still suffering whiplash from the worst holiday selling season in at least four decades, major toy sellers and upscale merchants—who must order Christmas stock earlier than most retailers—are exercising extreme caution as they plan for the rest of the year.
They're ordering at lower prices, they're keeping orders small and they're planning to buy more only if consumer demand picks up, said David Wolfe, creative director of The Doneger Group, which consults with stores on apparel buying.
For shoppers, this hesitance will translate into fewer choices and, if demand increases at all, fewer bargains.
For factories abroad, it's feeding desperation at the time of year when manufacturers usually start ramping up to fill summer and Christmas orders.
But retailers are more worried they'll be stuck with unsold merchandise they'll have to discount than that their shelves will go bare.
"We would rather chase than not and, if we cannot get it, we would rather not get it than have too much inventory," J. Crew Group chairman and CEO Millard Drexler told investors during a recent conference call. "Because none of us really have figured out where this thing is going, where is the bottom, where is it settling in at."
Saks chairman and CEO Steve Sadove recently reminded investors that full-price selling is "largely a result of supply and demand."
Shoppers are more likely to buy on sight if stores have something they want and know will be in limited distribution, lest the item sell out while they wait for the price to fall, explained retail consultant Walter Loeb.
So Saks is cutting inventory 20 percent this year. And both Saks and rival Neiman Marcus have pressed top designer suppliers to lower their prices.
Clothing and other specialty retailers must get their Christmas orders right because they do as much as 40 percent of their business at the end of each year, said Ken Perkins, president of research company RetailMetrics.