Consumers pay full price for some brands

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At a time when news about inflation and cost awareness seem inescapable, it’s remarkable to hear a retailer talk about consumers’ willingness to pay top dollar for things that make them happy.

“Each of our upbeat and upbeat lifestyle brands, Tommy Bahama, Lilly Pulitzer, Southern Tide, The Beaufort Bonnet Company and Duck Head, had their best year ever in 2021,” said the CEO of Oxford Industries. Thomas Chub said Wednesday, March 23 on the company’s fourth quarter earnings call, noting strong growth in revenue and earnings from year-ago and pre-pandemic levels.

In fact, the 58-year-old Atlanta-based holding company said the full-price trend was particularly strong in its direct-to-consumer (D2C) business, which accounts for 80% of its sales.

With consumers clearly wanting to be associated with positive things, Chubb credited the ability of the company’s “talented merchandising teams” to perform in a disruptive supply chain environment by creating engaging assortments on its websites and its retail stores that effectively showcased products as they arrived – even when they were late.

“Our ability to address supply chain challenges, along with our product innovation, is also driving strong forward backlog in our wholesale channel,” Chubb said.

What was, what will be

For the three months ending Jan. 29, Oxford said its sales rose to $300 million, marking a 35% increase from a year ago, and a $2 million lead over January 2020 before the pandemic changes the world.

Looking to the present, Chubb said he expects to be in a “slightly more promotional environment” due to inflationary cost pressures and a tough labor market, but he said that he was still confident in Oxford’s ability to deliver double-digit results, up and down. linear growth this year and this quarter.

Despite the current headwinds plaguing much of the industry, Oxford’s first-quarter sales are expected to rise 20-25%, a move that Chubb says reflects “very strong” quarterly results to date in direct and wholesale channels, the latter of which fell 25% last quarter as spring orders were pushed back to the first quarter.

Dice pricing

As much as Oxford was able to sell more full-price items and less markdown merchandise, Chubb called the retailer’s price increases in the prior quarter and year “very strategic and selective,” noting that some have already been deployed this year and others will come in the second half.

“I think those [price increases] will keep us ahead of the product cost inflation that we are seeing so far,” Chubb said. “If you look at the double-digit growth we’re forecasting, it’s not just about price increases. It is also unit growth. So we feel really, really good where the company is.

Chief Financial Officer of Oxford Scott Grassmyer said the increase in prices and unit sales were “pretty balanced”, adding that the supply chain dynamics that dominated much of last year were going to have a different impact this year.

“Just having more inventory, I think the whole market will be a bit more promotional than last year,” Grassmyer said.

Even so, he said he expects Oxford will still be able to increase gross margins in this environment.

To do this, Oxford is counting on Tommy Bahama – its biggest brand – to continue to generate outsized growth.

“On Tommy, what I’m going to tell you is that the men are incredibly hot, but the women are even hotter right now,” Chubb said. “It’s really amazing to see what’s happening in our women’s business.”

He also highlighted a milestone last month in which he sold $1 million worth of women’s activewear online in a single day.

“Through much of February, our women’s business online was actually bigger than the men’s,” he said. “The growth of males was very vigorous, but that of females grew even faster. It is not a coincidence. It’s very deliberate.

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