FTI Consulting Releases 2015 Holiday Retail Report
November 25 2015 - 7:30AM
FTI Consulting, Inc., (NYSE:FCN), the global business advisory
firm dedicated to helping organizations protect and enhance their
enterprise value, recently released its 2015 Holiday Retail
Report: Still No Urge To Splurge. While consumer confidence is
fairly high, experts from FTI Consulting’s Retail & Consumer
Products practice believe many shoppers are not eager to splurge
this holiday season, and as a result, retailers are planning with a
mindset of modest expectations.
According to the report, today’s sluggish retail sales
environment is influenced by several factors, including underlying
consumer weakness, increased spending on services and less on
goods, demographic changes, dampening consumption and record
consumer debt. The inability of retail sales growth to accelerate
despite a strengthening of the broader economy is an ongoing
concern for retailers. While FTI Consulting remains confident that
retailers will see a respectable uptick in sales this holiday
season, the results will be unspectacular.
“This is the season of an increasingly savvy customer,”
said Bob Duffy, Global Leader of FTI Consulting’s Corporate
Finance & Restructuring segment and the firm’s Retail &
Consumer Products practice. “Deals are at the top of shoppers’
minds this holiday season and they are equipped with more shopping
options and digital apps to help them quickly find their desired
item at the right price. Retailers must be more competitive than
ever to get those marginal sales.”
From a historical context, FTI Consulting notes that retail
sales, especially discretionary spending, should be stronger today
considering where we are in the current recovery cycle. Five years
into an economic recovery, consumer spending should be increasing
based on historical precedents, however it is not. At a similar
point in the previous two expansion cycles, from 1995-1999 and then
from 2004-2007, retail sales growth was much more robust than it is
currently. Consumer spending restraint on discretionary goods
continued in the first half of 2015, much as it has for the last
couple of years. Prominent retail bankruptcy filings in 2015 have
featured several apparel chains and the firm anticipates that
several more are on the way.
“Specialty apparel chains have been the most challenged segment
of U.S. retailing for the last couple of years,” said Stephen
L. Coulombe, Senior Managing Director in FTI Consulting’s Corporate
Finance & Restructuring segment and the firm’s Retail &
Consumer Products practice. “Specialty apparel retailers,
especially small and midsized chains, are not naturally positioned
to excel amid such intense competition in a highly price-sensitive
environment.”
The FTI Consulting report follows the previously released
holiday sales forecast, which projects a 3.9 percent increase in
retail sales for the holiday season. This year’s forecast for the
increase in retail sales is slightly stronger than the 2014
forecast of 3.5 percent, but weaker than last year’s 5.2 percent
gain. FTI Consulting also projects U.S. online retail sales of
consumer goods to reach $380 billion in 2016, a 12
percent increase from expected 2015 U.S. online sales of $340
billion.
“While consumer confidence remains fairly high compared with
recent years, it is yet to be seen if shoppers are confident enough
this holiday season to put aside their spending caution,”
said Keith Jelinek, Senior Managing Director in FTI
Consulting’s Corporate Finance & Restructuring segment and the
firm’s Retail & Consumer Products practice. “Regardless, we
believe that retailers will still face an uphill battle to get
customers business and end the season on a cheerful note.”
The 2015 Holiday Retail Report considers General Merchandise,
Apparel and Accessories, Furniture and Other Sales (“GAFO”) retail
sales and non-store sales for November 2015 through January 2016.
The report was compiled by experts in FTI Consulting’s Retail &
Consumer Products practice who have deep expertise in corporate
finance, strategic, operational improvement, liquidity management
and turnaround and restructuring services. The full report can be
accessed here.
About FTI ConsultingFTI Consulting, Inc. is a
global business advisory firm dedicated to helping organizations
protect and enhance enterprise value in an increasingly complex
legal, regulatory and economic environment. With more than 4,400
employees located in 26 countries, FTI Consulting professionals
work closely with clients to anticipate, illuminate and overcome
complex business challenges in areas such as investigations,
litigation, mergers and acquisitions, regulatory issues, reputation
management, strategic communications and restructuring. The Company
generated $1.76 billion in revenues during fiscal year 2014. For
more information, visit www.fticonsulting.com and connect with us
on Twitter (@FTIConsulting), Facebook and LinkedIn.
FTI Consulting, Inc.
1101 K Street NW
Washington, DC 20005
+1.202.312.9100
Investor Contact:
Abaigeal Healy
+1.617.747.1727
abaigeal.healy@fticonsulting.com
Media Contact:
Nicole Madison
+1.212.850.5647
nicole.madison@fticonsulting.com
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