Clothing Stores NAICS 458110

Mar 20, 2026 - Apparel Sales Outpace Retail Growth in February

• US clothing stores are benefiting from continued consumer spending momentum, with February marking the fifth consecutive month of retail sales growth, according to the latest CNBC/NRF Retail Monitor report. Clothing and accessories stores led all categories, rising 0.66% month over month and 11.05% year over year, significantly outperforming overall retail gains of 0.28% monthly and 6.24% annually. Growth is being supported by wage gains and low unemployment, even amid harsh winter weather. However, retailers remain focused on maintaining competitive pricing as consumers stay value-conscious and global uncertainty persists. Overall, strong year-to-date retail growth (6.04% total sales) signals resilient demand for apparel, though pricing pressure and external economic risks continue to shape strategy for clothing retailers.
• A recent Wall Street Journal report highlights growing legal and operational risks for US retailers, including clothing retailers, tied to tariff policy. Costco faces a proposed nationwide class-action lawsuit seeking refunds for tariff-related price increases after tariffs were ruled unlawful. The Court of International Trade has ordered the government to refund approximately $166 billion in tariff revenue, though timing and distribution remain uncertain. At the same time, Costco is among hundreds of companies that have sued the US government to recover tariff payments as importers, adding another layer of litigation risk. According to the WSJ, retailers used a mix of price increases, supplier negotiations, and cost absorption, making consumer-level refunds difficult to calculate. With more than 2,000 related cases filed, the situation underscores how tariffs create pricing complexity, legal ambiguity, and potential financial liability across the US retail industry.

• US clothing retailers face mounting profit pressure as returns and shrink reached $796 billion in 2025, according to Appriss Retail data in Chain Store Age. Of $706 billion in total merchandise returns, 14.2% ($100 billion) was preventable loss from fraud and abuse, including 12% from returns abuse and 2% from fraud. Returns channels most relevant to apparel remain in-store driven: 52% ($367 billion) came from buy in-store, return in-store (BISRIS), while 29% ($208 billion) from buy online, return in-store (BORIS) represents the fastest-growing fraud and abuse vector, critical for omnichannel clothing brands. Additionally, $90 billion in shrink was reported, with 73% preventable, including $26 billion from employee theft, and $19 billion from inventory errors. However, returns also drive loyalty: 80% of shoppers say a good return experience boosts repeat purchase intent, and 73% made an extra purchase after a positive return. For apparel retailers, balancing loss prevention with seamless returns is now central to protecting margins and customer retention.
• According to Retail Dive, Francesca’s announced closure underscores ongoing financial and supply-chain pressures within the US clothing stores industry. The specialty apparel retailer will cease operations following lender defaults, the loss of investor funding, and disrupted supplier financing. Francesca’s operated more than 450 stores across 45 states, signaling a sizable contraction in brick-and-mortar apparel retail. The shutdown includes the closure of its Houston corporate headquarters, affecting 202 employees through rolling layoffs. Despite prior efforts to stabilize the business, including discussions with at least six potential investors and a post-bankruptcy plan to maintain 275 stores, the retailer was unable to secure sufficient capital or product flow. For the broader clothing store sector, the closure highlights continued vulnerability among mid-sized fashion chains, particularly those reliant on external financing and complex supplier networks amid a still-challenging retail operating environment.