3 Holiday Apparel Trends Macy's and J.C. Penney Hope Will Lift Sales

NEW YORK ( TheStreet) -- U.S. consumers will be tempted from every corner of the mall this holiday season, being asked to plunk down a pretty penny for the new Apple ( AAPL) iPhone 6 and iPad, wireless headphones from Beats by Dre and even the latest Lebron James sneakers from Nike ( NKE) .

The competition for the dollars inside of physical and digital wallets may make what has been a challenging year for department stores like Kohl's (KSS) , Macy's (M)  and J.C. Penney (JCP)  that sell simple jeans and sweaters that much tougher.

According to data from the Census Bureau, sales at the nation's department stores have declined in each month of 2014 except for April, when sales were unchanged compared to the prior year.  Further, in a new survey by Gallup, it was noted that spending among middle and lower-income consumers, those whose annual household incomes are less than $90,000, was $76 per day in October, little changed from recent months.

Sluggish buying of apparel could be linked to tepid wage growth in the U.S., which is forcing many in charge of household spending decisions to choose: either save up for an iPhone 6 splurge during the holidays or forego the digital device in lieu of an $89 pair of Levi's jeans in the summer.

More recently, Kohl's warned that its third-quarter earnings would come in at the low end of its range  of $4.05 to $4.45 a share. Kohl's cited sales weakness in women's apparel, accessories, shoes and men's clothing as factors in the shortfall. At its Oct. 8 investor meeting, J.C. Penney cut its third-quarter same-store sales guidance, blaming a lackluster end to the back to school season.

The year-to-date stock price performances of department stores provide reinforcement of the persistent competitive problems the companies are dealing with, which is weighing on sales and profit margins. Shares of J.C. Penney and Kohl's have declined 19.2% and 2.98% year to date, underperforming the Dow Jones Industrial Average's 4.76% gain and the S&P 500's 8.74% advance. Macy's stock price has increased 5.1% year to date, marginally outperforming the Dow, while underperforming the S&P 500.

But, the likes of Macy's and J.C. Penney aren't planning to go down without a fight.

To get the attention of holiday shoppers, and ultimately their cold hard cash, department stores are banking on a couple key fashion trends as well as improved in-store presentation. Here TheStreet takes a look at the merchandise that is about to appear on department store sales floors following interviews with J.C. Penney and Macy's.

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1. Faux Denim
"We still think the blues (colored jeans) is important, and we'll have gray, but we will also have a big presentation in color, such as jewel tone, burgundy, and wine," shared Macy's ready to wear fashion director Stephanie Muehlhausen with TheStreet. "What's new for us," she added," is this idea of an active chic pant, it's a sexy denim pant that feels almost like a sweatpant." The sexy denim pants at Macy's, points out Muehlhausen, will "have the look of a denim pant", and it will "have the quality of an athletic pant."

A spokesperson at J.C. Penney also foreshadowed the impending arrival of a faux denim pant. "In general, we're continuing to see a shift away from denim to softer fabrication pants such as joggers, leggings and loose-fit knit pants. While this trend is big among girls and women, we're also seeing guys wear more jogger and lounge pants."

What Macy's and J.C. Penney want to do is bring back excitement and full-price sales to a denim category that has been forgotten this year among consumers choosing to wear Nike and Under Armour (UA)  athletic pants from sunup to sundown. Third-quarter sales at jeans maker Levi's declined 2% year-over-year in its Americas division. The company cited "lower sales of women's products" for the sales drop.

At V.F. Corp (VFC) , which owns the Lee and Wrangler brands, sales at its Americas segment region fell by a low single-digit percentage in the third quarter, with the company blaming "ongoing challenges in the U.S. mid-tier/department store channel and unfavorable consumer trends in women's denim."

In the third quarter, V.F. Corp. introduced something akin to faux denim: "Riders by Lee Heavenly Touch" that according to the company, has "the comfort of a knit with the durability of denim."

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2. Social Media-Friendly Shirts
A clever, inexpensive marketing tactic that will be used by department store retailers this holiday season: sell apparel with inspirational quotes or unique messages for the young adults that are apt to share the content on Twitter (TWTR) , Facebook (FB)  or Snapchat. "There is a lot around messaging, social media, inspirational quotes", remarked Muehlhausen, adding that "social media plays into that conservational message."

Department store retailers have to ensure the correct messages are printed on shirts and offered for sale to young adults, and the parents likely buying their threads. Uproar regarding teen apparel chain Urban Outfitters' "bloody" Kent State sweatshirt in mid-September offered a painful reminder how improperly messaged social apparel could go viral and tarnish a brand's reputation, financial performance and stock price.

Since Urban Outfitters' listed the Kent State shirt for sale on Sept. 14, the company's stock price has shed a whopping 22.7%. Further, the company warned of lower-than-expected third-quarter sales on Oct. 16.

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3. The Return of Plaid
Cowboy wannabes will be presented with slimmer fit flannel and plaid shirts this holiday season. For those not keen on the western-look, plaid and flannel will be shown as a colorful option to wear under a puffer jacket or vest. Said the J.C. Penney spokesperson on the topic, "For guys, we're capitalizing on the "cabin cool" looks that include plaid and flannel shirts, graphic tees and hoodies as well as puffer vests and jackets." Macy's Muehlhausen mentioned that "the flannel shirt is very important, as well as plaid -- for juniors it could be used as a layering piece." Muehlhausen concluded, "We definitely believe in the plaid and flannel idea for the fourth quarter."

Apparently, V.F. Corp also believes in the return of the western vibe. The company's Wrangler brand recently introduced Rock 47, a new brand consisting of boot-friendly jeans and western-themed plaid shirts. According to the company in its third-quarter earnings call with analysts, Rock 47 "shakes up traditional western style for both ladies and men." Thus far, said V.F. Corp., the response to Rock 47 "has been above expectations."

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