FTI Consulting Forecasts a 4.9 Percent Increase in Holiday Sales
WEST PALM BEACH, Fla., Nov. 20, 2013
WEST PALM BEACH, Fla., Nov. 20, 2013 /PRNewswire/ -- FTI Consulting, Inc.
(NYSE: FCN) today released its 2013 Holiday Retail Report, forecasting a 4.9
percent increase in holiday sales this season. Despite slowing discretionary
spending growth in recent months and anxiety over recent political turmoil in
Washington, D.C., FTI Consulting's team of leading retail and consumer
products industry professionals anticipate a potential silver lining to this
"Our forecast for 2013 holiday sales indicates that this will be an average
year by historical standards, but, nonetheless, one with which we suspect most
retailers will be pleased," said Bob Duffy, Global Leader of the firm's
Retail& Consumer Products practice and Global Co-leader of the Corporate
Finance/Restructuring segment. "Historically, there's been a trend of
resiliency in the sector, even in years of economic weakness or mild
contraction, and we expect this to continue during the holiday season as
retailers actively court consumers through aggressive promotions."
FTI Consulting believes that retailers' gross margins will continue to be
pressured by aggressive promotional activity. Retailers focused on the
bottom-line must decide how to approach holiday markdowns without jeopardizing
the profitability of the season. Declining EBITDA margins among retailers
during the last two holiday seasons show that large retailers are willing to
sacrifice gross margins to achieve incremental sales growth, and margin
pressure has continued through the first half of 2013. The promotional
strategies of certain large chains in the sector could quickly ripple through
the lower-end and mid-market retail sectors. Furthermore, the ambitious
turnaround efforts of several struggling chains could impact this season's
sales and margins for the entire middle market sector.
"Department stores continue to be a closely watched segment of the retail
sector given their challenge to stay competitive in today's value-oriented
shopping environment, and these retailers need a strong holiday season to
validate that their strategies are working," said Mr. Duffy. "Moreover, the
relevance and viability of some longstanding retailers will be closely watched
this season and could prove pivotal to their future as going concerns.
Ultimately it is the customer that wins in this type of environment, as
promotions and pricing transparency create better deals for shoppers with long
shopping lists and relatively fixed spending budgets."
The 2013 Holiday Retail Report considers General Merchandise, Apparel and
Accessories, Furniture and Other Sales ("GAFO") retail sales and non-store
sales for November 2013 through January 2014. The report was compiled by the
firm's team of leading retail and consumer products industry professionals
with deep expertise in corporate finance, strategic, operational improvement,
liquidity management, and turnaround and restructuring services. The report
also includes expectations for online retailers, the growing influence of
January sales on holiday sales and findings from proprietary consumer
research. The full report is available here.
About FTI Consulting
FTI 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 4,100 employees
located in 25 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 $1.58 billion in revenues during fiscal year 2012. For more
information, visit www.fticonsulting.com and connect with us on Twitter
(@FTIConsulting), Facebook and LinkedIn.
SOURCE FTI Consulting, Inc.
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