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July 4 Sales Bode Well For June Comp Results

NEW YORK — It wasn’t just Macy’s that had fireworks last week.<br><br>The heat, clearances and some pent-up demand sparked sales of seasonal goods — particularly swimwear, casual sportswear and sandals — through the...

NEW YORK — It wasn’t just Macy’s that had fireworks last week.

The heat, clearances and some pent-up demand sparked sales of seasonal goods — particularly swimwear, casual sportswear and sandals — through the Fourth of July weekend. That’s leaving retailers feeling good about the June period overall, and the fact that they’ve got clean inventories and some momentum approaching fall selling.

On Thursday, most major retailers will report sales results for the June period, which will include the Fourth of July. But in preliminary comments to WWD on Monday, several disclosed they beat last year’s Fourth of July volumes working with less inventory, and with about the same level of price cutting.

On July 3, some stores, including Neiman Marcus and Christopher & Banks posted sales ahead of plan for June, auguring well for others reporting this week; Wal-Mart last week predicted that June comparable sales through July 5, will be 5 to 7 percent ahead for the Wal-Mart division and up in the 3-to-4-percent range for Sam’s Clubs. On Monday, Mothers Works reported a 6.3 percent increase in June same-store sales .

The Fourth of July is important for clearances and getting ready for fall selling. Retailers do try to lure traffic by running specials on patio furniture, barbeques, coolers and other home items, as a way to drive consumers to check out clearances on what’s left of spring and summer apparel.

In terms of sales, however, the Fourth of July is among the least significant holiday periods, well below Thanksgiving, Christmas, Presidents’ Day, Memorial Day and Labor Day. For that reason, and because retailing has been as unpredictable as ever, stores remain as cautious and uncertain about the second half as they were before Independence Day.

“It was our strongest ready-to-wear month in a year,” said Bloomingdale’s chief executive, Michael Gould, who added that the company was ahead for the month and the Fourth of July week on a comp-store basis. “We took fewer markdowns on less stock and did more business,” he said. “Inventories are substantially lower on a comp-store basis and that’s helping enormously. We are turning goods much faster….As far as the future — who knows?”

At Macy’s East, “The Fourth of July was very strong. June was Macy’s strongest month since Sept. 11,” stated Hal Kahn, chairman and chief executive. “This was due in large part to the very warm weather against cool weather a year ago.”

As far as promoting, “We were aggressive, but not any more aggressive than a year ago,” Kahn said. “We had sharp price points on poor-selling merchandise. Our apparel business was double digits over a year ago, with swimwear leading the pack. Is this the sign of a turnaround? No. But there was great value and warm weather. People come to department stores and the malls when the product is right, the value is right and there is a need to buy. Our inventories are in the best shape they’ve ever been —leaner and more current.

“But our concerns for fall are the economy, the lack of newness and freshness in the apparel business, and in the supply channel too, everyone is playing it cautious. It’s getting tougher to get delivery on time from manufacturers and we would really like to see more fashion interest going on.”

J.C. Penney said Monday that department store sales for the first week of July were on track for an expected decline of 2 to 4 percent for the month. That means that the chain is managing its inventories well, even if its sales performance isn’t stellar. Catalog sales are also on track for a 20 percent decline for the month

Penney’s did cite jewelry, men’s wear and children’s wear as strong categories, while Bloomingdale’s best-performing categories were swimwear, bridge and contemporary sportswear and jewelry. Bloomingdale’s men’s wear made plan and beat last year’s comp-store volume, Gould said. “That’s a good sign that men’s is coming around,” Gould added.

Two major specialty chains, requesting anonymity, also reported that last week was robust. “It was really a great five days,” said one ceo of a national specialty chain. “Casual sportswear was driving the business, and the weather was the big spur. We sold a ton of shorts, a ton of T-shirts and a ton of sandals, and a touch of fall merchandise. Our clearances were flat with last year. All of the anxieties about terrorism didn’t deter shoppers. I didn’t see it.” Aside from casual sportswear, contemporary sportswear, shoes, accessories and jewelry also did well last week. However, special occasion and men’s remained weak.

“The Fourth of July was the culmination of restraint that retailers had been showing toward inventories and expense levels during this period of continuing volatility in the stock market, with corporate accounting scandals, the continued recession, and no improvement in unemployment levels,” observed Arnold Aronson, managing director of retail strategies, Kurt Salmon Associates. “There is a lot of uncertainty down the road.”

Apparently, malls were not affected much by national anxieties over the threat of terrorism, with the government issuing warnings that terrorists might strike on the Fourth. “Our centers felt no impact,” said Karen MacDonald, director of communications for Taubman Centers. “Traffic was similar to last year’s Fourth of July period. People were either outside enjoying the weather or inside enjoying being out of the heat. Our centers with movie theaters had strong traffic, in particular, with the release of ‘Men in Black II.’”

“There was no major fluctuation,” said a spokeswoman for Simon Property Group, the nation’s largest mall developer.

In a report on broadline retailing, analyst Daniel Barry of Merrill Lynch Global Securities Research & Economics Group, said that for June, “the best performing sector was dollar stores. The worst was consumer electronics.”

He predicted retail stocks should continue to do well in the short run, citing continued low exposure to accounting irregularities, few earnings disappointments and “potential for upside sales surprises in July because of favorable weather, which our weather consultants forecast will be the most favorable in four years.”Bloomingdale’s chief executive, Michael Gould, who added that the company was ahead for the month and the Fourth of July week on a comp-store basis. “We took fewer markdowns on less stock and did more business,” he said. “Inventories are substantially lower on a comp-store basis and that’s helping enormously. We are turning goods much faster….As far as the future — who knows?”

At Macy’s East, “The Fourth of July was very strong. June was Macy’s strongest month since Sept. 11,” stated Hal Kahn, chairman and chief executive. “This was due in large part to the very warm weather against cool weather a year ago.”

As far as promoting, “We were aggressive, but not any more aggressive than a year ago,” Kahn said. “We had sharp price points on poor-selling merchandise. Our apparel business was double digits over a year ago, with swimwear leading the pack. Is this the sign of a turnaround? No. But there was great value and warm weather. People come to department stores and the malls when the product is right, the value is right and there is a need to buy. Our inventories are in the best shape they’ve ever been —leaner and more current.

“But our concerns for fall are the economy, the lack of newness and freshness in the apparel business, and in the supply channel too, everyone is playing it cautious. It’s getting tougher to get delivery on time from manufacturers and we would really like to see more fashion interest going on.”

J.C. Penney said Monday that department store sales for the first week of July were on track for an expected decline of 2 to 4 percent for the month. That means that the chain is managing its inventories well, even if its sales performance isn’t stellar. Catalog sales are also on track for a 20 percent decline for the month

Penney’s did cite jewelry, men’s wear and children’s wear as strong categories, while Bloomingdale’s best-performing categories were swimwear, bridge and contemporary sportswear and jewelry. Bloomingdale’s men’s wear made plan and beat last year’s comp-store volume, Gould said. “That’s a good sign that men’s is coming around,” Gould added.

Two major specialty chains, requesting anonymity, also reported that last week was robust. “It was really a great five days,” said one ceo of a national specialty chain. “Casual sportswear was driving the business, and the weather was the big spur. We sold a ton of shorts, a ton of T-shirts and a ton of sandals, and a touch of fall merchandise. Our clearances were flat with last year. All of the anxieties about terrorism didn’t deter shoppers. I didn’t see it.” Aside from casual sportswear, contemporary sportswear, shoes, accessories and jewelry also did well last week. However, special occasion and men’s remained weak.

“The Fourth of July was the culmination of restraint that retailers had been showing toward inventories and expense levels during this period of continuing volatility in the stock market, with corporate accounting scandals, the continued recession, and no improvement in unemployment levels,” observed Arnold Aronson, managing director of retail strategies, Kurt Salmon Associates. “There is a lot of uncertainty down the road.”

Apparently, malls were not affected much by national anxieties over the threat of terrorism, with the government issuing warnings that terrorists might strike on the Fourth. “Our centers felt no impact,” said Karen MacDonald, director of communications for Taubman Centers. “Traffic was similar to last year’s Fourth of July period. People were either outside enjoying the weather or inside enjoying being out of the heat. Our centers with movie theaters had strong traffic, in particular, with the release of ‘Men in Black II.’”

“There was no major fluctuation,” said a spokeswoman for Simon Property Group, the nation’s largest mall developer.

In a report on broadline retailing, analyst Daniel Barry of Merrill Lynch Global Securities Research & Economics Group, said that for June, “the best performing sector was dollar stores. The worst was consumer electronics.”

He predicted retail stocks should continue to do well in the short run, citing continued low exposure to accounting irregularities, few earnings disappointments and “potential for upside sales surprises in July because of favorable weather, which our weather consultants forecast will be the most favorable in four years.”