Massachusetts clothing retailers that got hammered during the pandemic are scrambling back as consumer spending rises, pandemic restrictions ease, and states reopen at full capacity.
The shift has been apparent in the stock prices of public companies such as J. Jill and Destination XL Group Inc., both of which have outperformed the market since the start of the pandemic, despite both encountering serious financial troubles as the crisis took hold. Meanwhile, TJX, whose brands include Marshall’s and T.J. Maxx, saw its stock reach an all-time high last month before falling back in recent weeks.
Analysts say investor enthusiasm for retail stocks is a signal that the sector is in a strong position relative to the rest of the economy coming out of the COVID-19 crisis.
Marshall Cohen, chief retail industry advisor at the market research firm NPD Group., said some changes in consumer behavior that have helped retailers may linger. Even as people buy new clothes to return to work and school, many shoppers are still deferring spending on experiences such as nights out and vacations.
“Even though we are talking about experiences coming back, they’re not coming back at the rate we were at in 2019‚” said Cohen. “Take that out of the equation and that’s a lot of extra money in consumers’ pockets.”
In the apparel sector, consumers generally update their wardrobe seasonally, but kids are outgrowing clothing worn during the pandemic year and returning to the classroom, while many adults have either gained weight or shed some pounds, Cohen said. Even a modest return to pre-pandemic activities merits a wardrobe refresh for many.
“We’re starting to go out to restaurants, ballgames,” Cohen said. “We’re allowed to do things now so that means we have to get dressed again.”
The end of the pandemic has coincided with a recovery for Canton-based Destination XL, which operates roughly 225 stores across the United States and Canada and specializes in big and tall men’s apparel. The company reported total sales of roughly $111.5 million for the first quarter, up about 94.8 percent from $57.2 million during the first fiscal quarter of 2020.
The retailer struggled during the pandemic as stores closed and consumers shifted their spending habits. Destination XL’s stock was delisted from the Nasdaq stock exchange in December and transferred to the over-the-counter market after its shares dropped below a dollar.
Now, the company’s stock has more than quintupled since last June and is up from a low of 19 cents, closing at roughly $3.78 a share on Wednesday.
Destination XL chief executive Harvey Kanter said in a news release that the company expected sales to improve as more customers got vaccinated and remains “cautiously optimistic” amid ongoing COVID-19 changes.
The return to in-person commerce is also likely to help other major retailers based in New England.
TJX, which makes the majority of its sales in its stores, reported net sales of roughly $10.1 billion for the quarter ended May 1. That’s up nearly 129 percent from roughly $4.4 billion last year and up 9 percent over 2019. Its stock also reached an all-time high of $74.65 last month.
Shares of J. Jill closed at $21.44 on Wednesday after falling below $3 last March, and first-quarter sales increased 42 percent over the comparable period in 2020, to $129.1 million. The Quincy-based retailer narrowly avoided bankruptcy but reached an agreement with lenders in September.
Economic recovery over the next few months will continue to boost apparel sales, though shoppers will still look to stretch their dollars even as stimulus checks hit bank accounts, said Morningstar analyst Zain Akbari. Still, Akbari said, it’s difficult to draw direct year-over-year comparisons given that many stores were closed during the second quarter.
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