Higher SG&A Costs Hitting Retailers

WWD

It’s time for retailers to trim payroll, turn the lights down and eliminate supply-chain inefficiencies.

Retailers are getting pummeled by higher selling, general and administrative costs, according to an analysis by WWD of publicly traded mass, off-price and specialty apparel companies. Of the 33 retailers analyzed, 18 posted higher SG&A-to-sales ratios in the most recent quarter over the prior year. By channel, 10 of those companies were specialty retailers such as Abercrombie & Fitch, New York & Company Inc., Urban Outfitters and Pacific Sunwear of California Inc.

Within the 18 retailers that showed higher SG&A to sales costs, nine posted changes of more than 100 basis points, which is a red flag to investors who prefer not to see triple-digit changes. More tolerable increases would be between 10 and 50 basis points.

SG&A line items include things such as employee payroll and pensions as well as commissions. Other items include…

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