As originally published in California Apparel News on July 25, 2024.

Despite a bumpy first half of 2024, which saw a number of bankruptcies and retail closures, there exists an air of guarded optimism as the apparel industry enters the second half of the year. There are uncertainties that lie ahead including the direction of interest rates, continued political and military conflicts around the globe, and the 2024 United States presidential election.

With a keen business sense, a bit of guidance and even greater caution, decision-makers in the apparel industry can successfully navigate through the hurdles caused by these issues and beyond to survive into 2025. California Apparel News asked financial leaders in the apparel business: What successful strategies did you recommend for the challenges faced in the first half of 2024, and how should apparel-industry professionals approach the second half of the year?

Darrin Beer, western regional manager for CIT Commercial Services, a subsidiary of First Citizens Bank, shares his insight:

Most of the strategies discussed with our apparel clients earlier this year still apply going into the second half of 2024. We continue to emphasize inventory management, including diversifying the vendor base and managing product purchases in line with confirmed bookings.

With some exceptions, sales for the first half of the year for most apparel companies were relatively flat or slightly lower than the prior year. Hopes that the Federal Reserve would begin lowering interest rates by the end of Q2 were not realized. Now it’s looking like a Q3 or Q4 event. Rate reductions would be welcome relief for many apparel companies who have been carrying higher loans and thus greater financing costs. Recent increases in shipping costs have also put pressure on margins and expenses.

Most of our clients believe the second half of 2024 will improve as many retailers have adjusted inventories to lower levels and therefore have more ability to purchase goods to stock shelves. Of course, the consumer will need to cooperate and be willing to shop. Ultimately, the same message from the first half of 2024 applies equally well to the second half: Apparel companies should diversify their supply chains and manage inventory purchases and expenses in line with forecasted sales.

Link to original article: https://www.apparelnews.net/news/2024/jul/25/hope-floats-amid-economic-uncertainty-during-2024-2nd-half/