September 29, 2009

Uniforms a rare bright spot in lackluster back-to-school sales

Andria Cheng, MarketWatch

NEW YORK (MarketWatch) –– As apparel retailers seek out distinctive ways to spur demand in a dismal–looking back–to–school season, one ironic solution may lie in catering to the growing demand for no–frills school uniforms.

Gap Inc. , the No. 1 U.S. clothing chain, said it’s devoting more store space to a broader range of uniforms after taking notice of the shopping trend.
Closely-held French Toast -- which supplies branded and private-label uniforms to the likes of Target Corp. and the Kmart unit of Sears Holdings Corp. –– said it’s seen increased orders while keeping a profitable business.

J.C. Penney Co. has also vowed to expand its school uniform business this year, noting that more parents are buying lower–priced basics to mix and match their kids’ outfits, even if they aren't in a school that requires uniforms.

A range of factors in recent years have fueled the adoption of uniforms, such as the push for heightened school safety, discipline, the growth of charter schools and the drive to ease peer pressure. More recently, the recession's impact on consumer sentiment has made uniforms more attractive than ever for budget-conscious parents.

“It’s going to continue to be a growing trend,” said Judy Richardson, director of equity and urban initiatives at National Association of Secondary School Principals, which represents 30,000 administrators.

“What the economy is doing is make everybody more financially conservative,” she said. “Parents are looking at all the expenditures that aren’t necessary to make the students successful in schools.”

Double the number

A national survey commissioned by French Toast found a nearly 5% increase in the number of schools adopting some form of uniform code, the biggest such climb in at least the past three years, said Michael Arking, a vice president at the New York-based company.

He said that group amounts to about one-fifth of both U.S. public and private schools, with the number of students wearing uniforms almost double where it stood 10 years ago.


“The uniform clothes are cheaper than buying a pair of jeans,” said Denise Murray, principal of Joseph Neal Elementary School in Las Vegas, which is heading into its second school year under its “standard student attire” code. The policy calls for pants in navy blue or khaki, and polo shirts in navy blue or white. “You don’t have the children worrying about what they wear. Everybody is on the same playing field. It's a definite plus in this economy.”

Back–to–school sales this year are projected to decline after at least five straight years of increases, according to the National Retail Federation.

Juggling trends and rules

That fact isn’t lost on the nation's retailers.

As soon as the uniform code was adopted at the Joseph Neal school, with a student body of nearly 800, companies including Walmart Stores Inc. came calling, asking about the colors and styles they should stock, Murray said.

Old Navy, Gap’s lowest–priced chain and its biggest sales division, is making a “bigger statement” and offering a broader selection of uniform clothing, both in its stores and online, said spokeswoman Kris Marubio. The company has crafted promotions such as a pair of uniform polo shirts for $15 or two khakis for $25.

At GapKids, the company added choices such as an additional jumper for girls and an additional pair of shorts for boys. It’s also emphasizing uniforms by giving the business segment additional marketing support, featuring signs that call out key pieces and prices, Marubio said.

“That's an important element of any kids’ wardrobe,” said retail analyst Richard Jaffe of Stifel Nicolaus & Co. “It can be a good traffic driver if you have the right inventory and the right prices.”
Jaffe added, however, that the business tends to be less profitable for retailers because it’s like a commodity in which price is the key consideration for parents. To compete in this climate, he said, companies need to figure out how to satisfy the school uniform requirement while making the clothes more in tune with each season's trends, such as designing different pocket treatments or a slim fit for girls and a little baggier style for boys.

Indeed, school uniform fashions have had their own nuances over the years.

There are the more formal pleated plaid skirts for girls, and sport jackets with ties for boys in Catholic and other parochial schools. By contrast, uniforms being adopted lately at public schools have been geared toward a more causal and comfortable style, Arking said.


This year’s school uniform fashions include more colors, such as Kelly green, purple and gold in polo shirts; longer shorts for boys and girls; and narrower–legged pants for girls, a nod to the popularity of skinny jeans.


Lands– End, a Sears unit, this year expanded its uniform collection with low–rise chinos with flare cuts, and fitted tops for girls. It also introduced scrunchies, in addition to headbands and belts, designed to match plaids in girls' skirts.
“The trick,” said analyst Jaffe, “is to walk the line.”