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Retail Sales: Weather Outweighs War

The start of the war resulted in a sales slowdown, according to Federated Department Stores and Wal-Mart, but it wasn’t as bad as anticipated.

NEW YORK — Even with the advent of war, many found it too nice not to shop over the weekend.

This story first appeared in the March 25, 2003 issue of WWD.  Subscribe Today.

“Spring is stronger than CNN,” commented James Glassman, an economist with J.P. Morgan Chase & Co.

Federated Department Stores and Wal-Mart Stores cautioned sales for the week ended March 22 had indeed slowed down, but the impact was not as severe as feared.

Wal-Mart, the world’s largest company, said its comparable-store sales are on track for an increase in the low-single digits in March and up in the high-single digits in April.

The Bentonville, Ark.-based chain said it did experience the so-called “CNN Effect,” in which major news events keep potential shoppers glued to their televisions sets, late in the week.

However, the impact was minimal. Sales continued to be strong in pantry stock items, such as bottled water, canned meat, cereal bars, duct tape and plastic sheeting.

Similarly, Federated, parent of Bloomingdale’s and Macy’s, said March sales are below expectations following the start of the war with Iraq.

While comps were running consistent with its modest expectations up until the start of the war last Wednesday, the Cincinnati-based department store company said since then, sales have dropped below that level, but not by as much as it thought possible. On March 10, FD said it expected comps to decline 3 to 4 percent for the month.

J.C. Penney Co. Inc. said comps are tracking below its monthly goal for flat to a slightly down performance, but sales last week were in line with projections.

Already battered by winter storms, stores are hoping that consumers will take a brief respite from war coverage and check out the local mall, as many did over the weekend. However, the strong advance made in last week’s stock prices was practically erased Monday as advancing U.S. British troops encountered stiff resistance and last week’s optimism was replaced by uncertainty and even gloom in some quarters. After climbing more than 8 percent last week, the Dow Jones Industrial Average on Monday fell 307.29 points, or 3.6 percent to 8,241.68, while the Nasdaq dropped 52.06 points, or 3.7 percent to 1,369.78. The Standard & Poor’s retail index lost the most, giving back 12 points, or 4.2 percent, to close at 274.58.

Glassman said he expects giant gyrations that will mirror what is happening on the battlefield. “Every twist and turn will have a big effect on the market,” he said.

Ron Frasch, chairman of Bergdorf Goodman, had no complaints about the effect of war coverage or even antiwar protests in New York. “We had a very nice weekend,” he said.

With a promotion on the contemporary-laden fifth floor, as well as a personal appearance by the designer of Joie, Frasch emphasized, “I think it’s the biggest Saturday we’ve had on the fifth floor since September, but all through the store it was strong day. We sold a lot of cargo pants, a lot of cargo pants.”

“Both days were very, very busy,” said Janet Cesario, marketing director at The Mall at Short Hills. “Traffic was higher than normal on an average Saturday, and Sunday we were packed.” Spring apparel and home goods sold well, she reported.

“The shopping center was crowded and it was beautiful. And since we’re not a mall, we’re an outdoor center, that helps,” said Deirdre Costa Major, creative director at the Americana Manhasset.

At Fort Myers, Fla.-based Chico’s, with 368 stores nationwide, traffic and shopping patterns were unchanged over the weekend, according to Charlie Kleman, chief financial officer.

Kleman did not expect the war to affect business as did the events of Sept. 11, 2001, when same-store sales went from 16 percent up to 30 percent down overnight, and stayed there for around 10 days.

At Mall of America in Bloomington, Minn., the nation’s biggest mall, traffic was brisk, noted a company spokeswoman. “We had a good weekend, but this is normally one of our busier times of the year thanks to spring break. Lots of families are shopping our mall right now. Several state sports tournaments are taking place now in the Twin Cities, and we’re having good traffic thanks to that, also.’’

In the Washington, D.C., area, where super-tight security and antiwar protests are now routine, no one was sounding an alarm about retail sales after five days of conflict.

Mark Tomlin, vice president at Saks Jandel, a designer boutique in Chevy Chase, Md., said earlier in the month sales were “much stronger.” However, over the weekend customer traffic “remained steady. We’re making our expectations.”

Cropped camouflage cargo pants showed strength at Up Against the Wall, a 19-store teen sportswear chain based in the capital, where weekend business was strong, said Wendy Red, fashion director.

“As adults we might think we need to watch our pennies and pull back, but teens just go out and do what they do,” Red said.

At Tysons Galleria in McLean, Va., anchored by Saks, Neiman Marcus and Macy’s, sales were “better than usual” over the weekend, said Jaime Friedman, senior director of marketing. “The feeling is that war did not have an effect on customers’ shopping habits.”

Aventura Mall, in Aventura, Fall, near north Miami Beach, reported no drop-off in traffic patterns, said a spokeswoman. Pre-planned events, such as a summer camp expo and the arrival of the Easter Bunny, helped keep traffic up. Security at Aventura was increased, as it is for each high-level terrorist alert. In-house security personnel was increased, with cars parked for more than 10 minutes near the mall towed away.

“Shopping traffic was great this weekend,” said a spokesman for General Growth Properties, the Chicago-based firm that owns and manages 160 malls across the U.S. “It’s spring and the weather is warm. The troops and the war are on shoppers’ minds for sure, but they’re still getting out to the malls.

“Many of our malls reported increases in traffic over this time last year, and some were ahead by double digits. One mall manager had gains of 13.7 percent and said traffic was like Christmas.’’

“There seems to be no specific trend but, overall, traffic has been down between 7 and 8 percent since the war began,” noted David Contis, chief operating officer of The Macerich Co., owner of 57 malls in the U.S.

A spokeswoman for Westfield Shoppingtown Century City in Century City, Calif., said, “We’re finding our shoppers are glued to their television sets but it’s a short-term issue, not a long-term one. When the war subsides people will progress with their normal spending patterns.”

Mark Tomlin, vice president at Saks Jandel, a designer boutique in Chevy Chase, Md., said earlier in the month sales were “much stronger.” However, over the weekend customer traffic “remained steady. We’re making our expectations.”

Cropped camouflage cargo pants showed strength at Up Against the Wall, a 19-store teen sportswear chain based in the capital, where weekend business was strong, said Wendy Red, fashion director.

“As adults we might think we need to watch our pennies and pull back, but teens just go out and do what they do,” Red said.

At Tysons Galleria in McLean, Va., anchored by Saks, Neiman Marcus and Macy’s, sales were “better than usual” over the weekend, said Jaime Friedman, senior director of marketing. “The feeling is that war did not have an effect on customers’ shopping habits.”

Aventura Mall, in Aventura, Fall, near north Miami Beach, reported no drop-off in traffic patterns, said a spokeswoman. Pre-planned events, such as a summer camp expo and the arrival of the Easter Bunny, helped keep traffic up. Security at Aventura was increased, as it is for each high-level terrorist alert. In-house security personnel was increased, with cars parked for more than 10 minutes near the mall towed away.

“Shopping traffic was great this weekend,” said a spokesman for General Growth Properties, the Chicago-based firm that owns and manages 160 malls across the U.S. “It’s spring and the weather is warm. The troops and the war are on shoppers’ minds for sure, but they’re still getting out to the malls.

“Many of our malls reported increases in traffic over this time last year, and some were ahead by double digits. One mall manager had gains of 13.7 percent and said traffic was like Christmas.’’

“There seems to be no specific trend but, overall, traffic has been down between 7 and 8 percent since the war began,” noted David Contis, chief operating officer of The Macerich Co., owner of 57 malls in the U.S.

A spokeswoman for Westfield Shoppingtown Century City in Century City, Calif., said, “We’re finding our shoppers are glued to their television sets but it’s a short-term issue, not a long-term one. When the war subsides people will progress with their normal spending patterns.”