Thrifty teens don’t use online payday loans
It seems you won’t see shoppers taking out online payday loans to buy expensive clothing brands. It seems even teenagers are jumping on the economic bandwagon.
Abercrombie & Fitch reported a big drop in third-quarter profits, but the retailer was expecting it. The clothing company’s profits dropped 46 percent.
Other big names have hard times
Abercrombie also owns the Hollister brand, but brand loyalty seems to be a thing for better economic times. The same is true for Nordstrom, J.C. Penney and Kohl’s, who all reported a decline in earnings.
Meanwhile, thrift stores and discount retailers are seeing profits rise. I guess people don’t need online payday loans to buy used clothes.
Retailer stands its ground
Abercrombie has said it will not cut its prices. Because of this, stock watcher Dividend recommends that investors do not buy stock in the company. Even Starbucks has come around and started cutting customers deals, but Abercrombie says it won’t budge. I guess we’ll see.
A new era
Forbes says the economic stimulus package will do nothing to help retailers. People have started saving again, an American tradition that went out of style for a while. Analysts for months have been saying that the recession will have a permanent effect on people’s spending habits.
Any tax breaks people get or extra income from new jobs will go straight into the savings account.
The (retail) industry is poised for thousands more closings, especially for nonessential goods like high fashion and electronic toys, and big items like furniture. Layoffs abound. -Tom van Riper, Forbes.com
Not everyone saving
Economist are saying that if everyone starts saving 10 percent of their incomes all at once it will be a catastrophe. Currently the average savings rate is between 3 and 4 percent, so we probably don’t need to freak out just yet. Also, more and more people are using online payday loans, so it’s safe to assume not everyone has a cushy savings account.
People are becoming smarter than ever in means of their finances. I’ve always asked myself why many people reject to putting in a little effort to save money. That little effort can save you big money. I’m not saying the current recession is a good thing. I just think it can somehow be considered a blessing for many. People are finally realizing just how ridiculous their usual financial dealings really are. I am not encouraging people to shy away and become discouraged to spend, but if you’re budget is in need of immediate help, don’t make matters worse; don’t spend money you don’t have.
When times get tough, we look for better deals. Oprah said that the first thing she did when she made more money was to buy better towels. I guess the same is true in reverse, when we have less money we buy cheaper items. However, we will still need clothes, so there should be an increase in sales in the less expensive stores. That’s where you’ll see me shopping.
This would be sort of predictable. If you need a pair of jeans, and the economy is in such shape that you don’t know that you’re going to be employed next week – spending over $100 for pants really can’t be justified. No to mention the fact that you’d probably have to bust out the credit card for them, and who wants to do that these days? I certainly wouldn’t. Not that I’d shop at Abercrombie anyway – I’m more of a Penney’s kind of guy. Why pay 20-50% more for the same stuff?