Most Recent Articles In Financial
Latest Financial Articles
- Potential Suitors Emerge for Sergio Rossi
- Greek Chill Hits Fashion, Retail Stocks
- Bon-Ton in Sale-Leaseback Deal for Six Properties
More Articles By
Christmas can wait, at least for many shoppers.
That seemed to be the mantra among the hordes of consumers who rushed to take advantage of doorbusters and other bargains during Black Friday weekend, as many preferred to shop for themselves ahead of gifts. As for presents under the tree, electronics and toys ruled the weekend once again, leaving fashion lower on shopping lists and stores poised for price slashing in the weeks ahead.
But retail executives remained upbeat about the fourth quarter, pointing to the weekend’s buoyant demand for handbags, diamond jewelry, cashmeres, party dresses and gift cards. Department and specialty stores such as Saks Fifth Avenue, J. Crew, Macy’s, Bloomingdale’s and Lord & Taylor were far less promotional than discounters and outlets, and no more so than last year.
According to the National Retail Federation’s 2006 Black Friday Weekend Survey, conducted by the BIGresearch consumer research firm, more than 140 million shoppers hit the stores on Black Friday weekend, spending an average of $360.15, up 18.9 percent from last year’s $302.81. “Each year, consumers have greater expectations for doorbuster specials, forcing retailers to raise the bar,” said NRF President and chief executive Tracy Mullin. “This year, stores did not disappoint as deals on high definition televisions and apparel were just too good to pass up.”
As of Sunday, the average person has completed 35.6 percent of their holiday shopping, showing no change from last year, NRF said. Only one in 12 consumers has finished their holiday shopping. NRF continues to project that holiday sales will rise 5 percent this year to $457.4 billion. The survey polled 3,090 consumers from Nov. 23 to 25.
Jack Kyser, chief economist with the Los Angeles Economic Development Corporation called the weekend “a good start” to a potentially robust season, citing increased consumer confidence in the economy in Southern California following the Democratic sweep in the mid-term elections. “In Southern California, the economy is very, very good. Los Angeles County unemployment is 4.3 percent — and we characterize that as beyond good employment — and the housing market didn’t tank like people thought it would.”
Even as many consumers focused on buying for themselves over the Black Friday weekend stores recognize the serious gift shopping will happen, even if it comes late in the season. Stores are generally projecting mid-single-digit gains, despite relatively mild temperatures that hurt demand for coats and cold-weather accessories during the weekend. The home market also lagged, as the housing market softens.
“If you didn’t have electronics, you may have suffered,” observed Ken Lakin, chairman and ceo of Boscov’s, the Reading, Pa.-based full-line department store chain.
“We were pleased with our results. We were right on target, but I hope it gets cold,” said Michael Gould, chairman and ceo of Bloomingdale’s. “We have markdowns and good value in our stores, but we don’t deal with doorbusters. Our average unit ticket sale on Friday was 10 percent higher than last year, and on Saturday, it was 13 percent higher, pretty much in line with our average unit price increase all year long, which was about 9 percent higher. That says to me we sent a much better ticket out the door.”
Gould acknowledged the high level of self-purchasing, and cited fashion accessories, particularly handbags, as the strongest area, with shoes from Chanel to Uggs, as well as contemporary sportswear and denim, also strong.
“It was a good start, but it’s a long time between Thanksgiving and Christmas,” said Ron Klein, chairman and ceo of Macy’s East. “The crowds looked a little bit larger this year.”
He cited men’s collections, cosmetics, handbags, dresses, and fine jewelry as top categories. “The weather didn’t ignite cold-weather merchandise, but cashmere was strong,” Klein said. “Cashmere is not about keeping warm. It’s about affordable luxury.”
Jane Elfers, ceo of Lord & Taylor, agreed with Klein. “Nothing happened over the weekend that would make me change my outlook,” she said. “Department stores are in a good place. It will be a fairly strong season. By far the best businesses [over the weekend] were handbags, fine jewelry which is really diamonds, Ugg boots, special occasion and little black dresses, cocktail dresses, designer handbags particularly from Coach and Dooney & Bourke. “It’s a six-week season and we just finished the first two days.”
But if the opening weekend is any indication, the holiday will once again be about hot electronic items, toys and gift cards rather than a fashion trend. “It was kind of a strange weekend, with very high volume and traffic,” Boscov’s Lakin added. “Electronics and jewelry really led the day. We had to reorder plasma TVs, probably the single biggest item we had, and a lot of jewelry,” particularly diamond stud earrings and tennis bracelets.
“Apparel didn’t really happen. It was OK.”
In years past, such categories as Nordic fleece, pashminas, boots, chunky merino wool and cashmere sweaters would pace sales right after Thanksgiving, Lakin said. But with that not happening, “prices are going to come down on apparel and cold-weather items just when it gets cold, so it should be good for the consumer.”
It could be a couple of weeks before retailers see a significant pickup in winter-related goods, considering a mild first half of December, and a colder second-half forecast. “There could be a lot of inventory around, and you better believe it will be sharply priced,” Lakin said.
Steve Sadove, ceo of Saks Fifth Avenue Enterprises, was out in the malls in the Washington D.C. area Friday and Saturday. “There certainly was a lot of traffic. The mood was good. Stores were busy. People were responding to the fashion and a lot of the key items, things like handbags, accessories, cosmetics, fragrances, and men’s sportswear.”
However, the outlook for Saks’ regular-priced stores looks good as well, especially with the stock market strong and high bonuses expected on Wall Street. “The mood at the luxury end is positive,” Sadove said. “The day after Thanksgiving is very important. It sets a tone for the season, but it’s not the only important day,” Sadove added. “The luxury sector is somewhat less dependent on that day than other parts of the retail industry. Loyalty shopping days at Saks can be bigger volume days than Black Friday.”
For mainstream retailers, however, Black Friday is typically the second or third largest volume day of the year, next to the Saturday or Saturdays before Christmas Day. It also has become a period of major promotions by retailers, some of whom opened at midnight this year for the first time to excite the consumer. But in many cases, it was the promotions that consumers zeroed in on, rather than regularly priced merchandise.
“Everyone was cherry picking for sales,” admitted one ceo of a fashion chain. “Electronics, doorbuster specials, toys, MP3s, iPods, plasma TVs, they were all out of control. That didn’t help us a lot. Thanksgiving weekend was not a great indicator for us. It’s too early to tell,” how the season will evolve.
While many discount stores were packed over the weekend, it wasn’t all holiday cheer. Wal-Mart said its comp store sales would dip 0.1 percent in November, the first negative comp in years and a continuation of the retailer’s woes in its flagship U.S. business. Walmart.com was caught off guard by a traffic surge that began in the wee hours Friday morning and caused crashes and delays. Starting Thanksgiving Day, the site’s traffic has been up 60 percent, which “greatly exceeds the high end of our forecast,” said Walmart.com spokeswoman Amy Colella on Friday.
Wal-Mart offered several Web-only deals, including a George bathrobe for $12. The best seller was a Kodak digital camera and printer for $189.74. Samsclub.com also offered Web exclusives on Black Friday, including an Anne Klein silk trenchcoat for $88.88 and half-carat diamond studs for $897.
At the Atlanta Wal-Mart, open a month ago, the hottest apparel items were Levi women’s jeans, on sale for $12, and terry cloth robes, for men and women, at $17, which went through “several boxes of stock before noon,” said Rudy Sims, market manager for nine Wal-Marts in North Georgia.
“Our plan of spreading out hot items on endcaps throughout the stores, to avoid crowding, worked well,” said Sims.”
At a Target in Saugus, Mass., shoppers jumped on deals. A Mossimo wool portrait-collar coat, on sale for $35, was nearly gone. Behnaz Sarafpour’s white cocktail dress with black cummerbund and plum silk blouse with grosgrain tie also seemed to be a hit, based on low inventory.
The Minneapolis-based retailer appeared to be doing a brisk business in cold-weather accessories, video games and holiday decor. Close to a dozen staffers were restocking the Christmas department and answering questions about light sets and artificial trees.
At a Target north of New York City on Saturday, demand also seemed to be stronger for holiday decorations and electronics than for fashion. The accessories department was heavily shopped, but the women’s area — including the Sephora and Isaac Mizrahi items — was virtually deserted.
Karen MacDonald, director of communications for Taubman Centers, said: “We had two solid days of post-Thanksgiving business, with Friday definitely the stronger of the two. Most stores were trending low-to-mid-single digit gains for Saturday, and Friday, with Florida trending higher.
No particular item stood out, but electronics, toys and beauty were the hottest categories. There were more teens and more men out for early birds on Friday, particularly teens. They were out there five or six o’clock in the morning.”
The luxury mall Lenox Square in Atlanta, owned by Simon Properties, opened at 6 a.m. Black Friday, two hours earlier than recent years. Approximately 40 stores, including Macy’s, Gap, The Limited, Express, Victoria’s Secret and the Apple Store participated in Black Friday sales that ended at noon, and 65 had day-long promotions. “Such Black Friday discounts aren’t as common in mall stores as in Wal-Mart, Target and Best Buy,” said Dewayne Herbert, marketing manager for Lenox Square. “The parking lot was 40 percent full at 6 a.m.”
“Traffic was absolutely much better than last year,” said Janet LaFevre, marketing manager for Glendale Galleria in Glendale, Calif. “And it started really, really early. I was shocked at the number of people in the center at 5 a.m. Even though the shopping center wasn’t supposed to open until 6 a.m., stores like Penney’s and Disney opened earlier.”
“Crowds were larger than expected,” said Debra Gunn Downing, executive director of marketing for South Coast Plaza in Costa Mesa, Calif., where stores began opening at 5 a.m. Many luxury stores at the center, including Tory Burch and Bulgari, reported significant full-priced selling, and a large percentage of people who were shopping for themselves.
SPECIALTY STORES ON PLAN
At J. Crew, “We are very pleased with business both Saturday and Friday. The momentum for J. Crew continues,” said Margot Brunelle, head of marketing. Bestsellers included argyle cashmere cardigans and crewnecks, $168; cashmere hoodies, $168; double cloth wool coat, $298; as well as wedding and party dresses, including an Ava silk halter $215; and a silk taffeta tuxedo dress with embroidered eyelet trim, $1,450 to $2000, depending on the length. Novelty lounge pieces have also been selling well, including boxers and pull-on pajama pants.
Dress Barn and its sister division Maurices both reported making plan Friday and Saturday. “We got a lot of action on dressy merchandise, and had strong selling in new spring receipts. We are confident for December,” said Keith Fulsher, Dress Barn’s senior vice president and general merchandise manager. “Inventories are clean,” with denim, hoodies and sweaters showing the strongest sales, said Lisa Rhodes, executive vice president and general merchandise manager for Maurice’s.
Gap Inc., which has been struggling all year, had a ray of hope. “There’s a sense that there was a steady stream of traffic and everyone was pleased,” said Robin Carr, director of media relations. “Traffic in Banana Republic and Gap stores was up from last year. ”
Shearling coats, crocodile handbags and jewelry sold well at Louis Boston on Friday and Saturday. “The usual suspects for women who have generous husbands,” quipped Louis Boston owner Debi Greenberg.
In Wellesley, Mass., GrettaLuxe had a big denim day Friday, seeing as many out-of-towners as regular clients. J Brand denim and cord sold well, as did True Religion. Black denim in tapered but not superskinny fit sold well.
Sales Friday and Saturday were up about 15 percent from last year at Jake, an upscale men’s and women’s boutique with locations along Southport Avenue and Rush Street in Chicago, owner Lance Lawson said.
Shoppers gravitated to Jake’s private label cashmere dresses and tunics for $285 and party dresses, most notably short shiftdresses from Thread Social and various styles from 3.1 Phillip Lim, Lawson said. Denim sales, in contrast, have slowed to almost a trickle, except for Cheap Monday black tight jeans, $65. Tom Ford sunglasses, $300, continue to be a popular gift item as well, Lawson added.
The 50-degree plus temperatures over the weekend helped Scoop NYC in Chicago score high numbers. The above-normal temperatures put shoppers in a good mood, said store manager Suzanne Workman. When two women wanted the same wool Thread for Scoop jumper one bought the dress in a larger size so she could take it home Friday. Other top sellers included quilted leather Scoop ballet flats for $165 and loungewear from Free City at $148 and sweaters from Marc by Marc Jacobs starting at $175, Workman said.
DEPARTMENT STORES ENCOURAGED, NOT ECSTATIC
“It leaves one optimistic, but it’s a long season,” said Robert Mettler, chairman and ceo of Macy’s West, whose stores opened at 6 a.m. on Friday to hordes eager to take advantage of storewide doorbusters. The key to the season, according to Mettler, is “ensuring every week there’s new and interesting products, so the customer is enticed.”
“Out of the gate, we feel the traffic is a little stronger than last year,” said Lori Randolph, vice president and general manager of the Macy’s Union Square flagship in San Francisco, adding that the line there comprised roughly 200 people. Bestsellers in women’s apparel at the flagship included cashmere sweaters and velour separates from Macy’s private label, Charter Club, as well as flared and skinny jeans from Citizens of Humanity and Seven for All Mankind.
“The company is definitely feeling encouraged by the resurgence in the home division,” said Randolph. “We had a very busy Friday morning in the Cellar…and gift cards sold well. Every year more and more people are purchasing them.”
Traffic at Macy’s on State Street seemed comparable if not slightly higher than last year when it carried the Marshall Field’s moniker, and crowds still gathered outside elbow-to-elbow often six people deep to see the store’s popular holiday window displays, said Jennifer McNamara, public relations manager for Macy’s North. Shoppers took advantage of Macy’s Friday 6 a.m. until noon special promotions, such as a Sebring 5-piece luggage set for $49.99, and a one-carat diamond circle pendant for $99.99. Otherwise, cashmere sweaters at a variety of price points, outerwear and handbags were best-selling categories Friday and Saturday, according to the store.
In particular, women bought leather jackets, jackets with faux fur trim and puff jackets as well as handbags from Coach, Kate Spade and Dooney & Bourke, she said.
At Belk Inc., “overall we were pleased with the day,” said Steve Pernotto, executive vice president. “Key classifications were sweaters and knits, denim, cosmetics and personal electronic entertainment items. Consumers in the stores were upbeat and having fun.”
Based on consumer demand at Shopping.com on Black Friday, the most popular products for the 2006 holiday season include:
Apple iPod Nano and iPod Video
Microsoft Xbox 360 video game console
PlayStation 3 video game console and
PlayStation Portable video game console
Canon PowerShot SD600 digital camera
Panasonic 50 inch HDTV plasma TV
Samsung 42 inch HDTV
TMX Tickle Me Elmo
LeapFrog Leapster multimedia learning system
My Little Pony crystal rainbow castle
Hasbro Fur Real Friends Butterscotch Plush Pony
Fisher-Price Power Wheels Barbie Jammin’ Jeep Wrangler
Cuisinart 12-Cup coffee maker
Dirt Devil Kone vacuum
iRobot Roomba vacuum
Cuisinart 7-Cup food processor
George Foreman G5 indoor grill
Michael Kors Michael slouch harness boot
Adidas a3 Gigaride men’s running shoes
Ugg’s women’s boots
Spy Astro sunglasses
Oakley Women’s Minute sunglasses
— With contributions from Georgia Lee, Rusty Williamson, Beth Wilson, Emili Vesilind, Kristi Ellis, and Kate Bowers