Apparel Online Bangladesh Magazine June Issue 2018 | Page 77

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Amazon records 43% surge in net
sales to US $ 51 billion in Q1
Amazon Inc., the US-based
global e-commerce retailer, has
reported a 43 per cent increase
in its net sales to US $ 51.0
billion in the first quarter of the
current fiscal as compared to US
$ 35.7 billion in the same quarter
last year.
Operating cash flow for the
trailing 12 months ending on
March 31, 2018, noted a 4 per
cent increase to US $ 18.2 billion
from US $ 17.5 billion in the
same period ended March 31,
2017.
Further, the online mammoth
reported a 92 per cent increase
in its operating income during
the reporting quarter to US $ 1.9
billion from US $ 1.0 billion in
the same quarter of fiscal 2017.
Net income for the reporting
quarter totalled US $ 1.6 billion
as compared to the net income
of US $ 724 million in the
corresponding period of last
year.
Now, the retailer expects net
sales to be between US $ 51
billion and US $ 54 billion in
the second quarter of 2018.
Operating income is estimated to
be around US $ 1.9 billion.
In a separate development,
Amazon announced to increase
its workforce by hiring 200
engineers and other IT workers
for its tech hub in the North
Loop. Around 150 people are
currently working here. The
company has its tech offices at
Minneapolis, Pittsburgh, Detroit,
New York and Austin, Texas.
Amazon, which has been
working in an extensive way
globally to enhance its reach and
better serve its customers, has
around 45,000 people employed
at its Seattle headquarters.
Meanwhile, a Morgan Stanley
study maintained that the
retailer will make its way and
swiftly rise to the highest rank
in the US apparel retail industry
this year by overtaking Walmart
Inc.
The report further adds that
Sears Holdings and Macy’s will
also face the brunt of Amazon’s
rise. Morgan Stanley predicts
they’ll have just 8 per cent of the
American apparel market by the
year 2022, down from 24 per cent
back in 2006. In this context,
large mall-based chains such as
Ascena Retail Group, L Brands,
Ralph Lauren and Chico’s, will
also witness a loss in their
respective market shares.
Amazon reflects a 33.6 per cent
gain Year-to-Date (YTD) and a
whopping 73.7 per cent return
over the most recent 12 months.
Further, it has gained more
shoppers for its well-priced
apparel products. 48 per cent
Amazon apparel shoppers say
they expect to pay less than
full price when buying clothing
or footwear on the site. 32 per
cent of them said they prefer
it because Amazon offers the
lowest prices and 49 per cent
stated that Amazon offers good
value for money.
The e-commerce giant’s success
in apparels is hard won. It has
steadily worked to develop
private label clothing in several
segments and with its newest
addition of Prime Wardrobe, it is
only gaining more prominence
and popularity among shoppers.
Notably, it would not be that
easy for the No. 1 e-commerce
company in the US as Walmart
too is making some serious
efforts in bolstering and
streamlining its apparel
business. The retailer has even
launched private labels.
It is being reported that
Walmart will revamp some of its
existing apparel lines including
Time and Tru for women, Terra
& Sky for plus sizes and Wonder
Nation for children, to increase
sales in the segment. It’ll also
reconfigure George apparel
brand to sell items only for men,
while Faded Glory, White Stag
and Just My Size labels will
be no longer available on its
shelves.
With plans in place, both the
retailers are out there battling
to be on top in apparel business;
it remains to be seen who dons
the crown by the year end.
US retail
business
improved by 5%
in March 2018
Despite market volatility,
unseasonable weather and
uncertain economic policies,
retail sales during the month of
March 2018 in the US increased
by 0.3 per cent on a seasonally
adjusted basis over February and
5 per cent year-over-year. This
was revealed by National Retail
Federation (NRF), the world’s
biggest retail trade body. “In view
of the hostile economic situation,
the figures can be seen as a healthy
spending report,” stated NRF
Chief Economist Jack Kleinhenz
in a statement issued by the body.
During the month under review,
online and other non-store sales
reported a 7.6 per cent increase
year-over-year when compared
to February 2018 on a seasonally
adjusted basis. Segment-wise,
furniture and home furnishings
sales in March 2018 increased by
4.1 per cent year-over-year and
up by 0.8 per cent over February
(seasonally adjusted). Whereas,
clothing and clothing accessory
store sales improved by 6.1 per
cent Y-o-Y and down 0.8 per cent
over February.
General merchandise store sales
during the reporting period went up
by 6.3 per cent year-over-year and
up by 0.3 per cent from February.
However, sporting goods stores’
sales declined by 0.9 per cent
year-over-year and down 1.8 per
cent from February. “Consumers
continue to show resiliency in
spending, and these numbers reflect
how the economy is performing with
a strong job market, gains in wages,
improvements in confidence, rising
home value and judicious use of
credit,” explained Jack Kleinhenz.
The organisation hopes the sales
to improve further in the coming
months. NRF has already predicted
that 2018 retail sales would grow
between 3.8 per cent and 4.4 per
cent over 2017.
www.apparelresources.com | JUNE 2018 | Apparel Online Bangladesh
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