June same-store sales results, released today, are expected to be more of the same — weak.
With the weather cool, consumer confidence shaky and unemployment rising, analysts anticipate June will increase pressure on retailers during the second quarter. As they struggle against consumer frugality and compete with the stimulus-bolstered results of a year ago, there could be even greater temptation to impose deeper markdowns to build back-to-school business and limit inventory exposure.
“We believe June should be another, at best, poor month, where the best most retailers will be able to point to will be easing comparisons going forward, and that results were not as bad as the holiday season,” said retail analyst Eric Beder of Brean Murray, Carret & Co.
Although Beder acknowledged warmer weather in the last week of June spurred shoppers to come out, the positive effects were reduced. Most retailers already had become more aggressive in discounting as the month progressed to offset the clearance nature of the period.
Late Wednesday, teen retailers Zumiez Inc. and Hot Topic Inc. reported comp declines of 19.3 percent and 7.9 percent, respectively. Torrid, Hot Topic’s plus-size concept, saw its comps fall 10.3 percent, and comps slid 7.2 percent at the namesake chain.
Analysts were forecasting a 6.1 percent dip at Hot Topic and a 19.6 percent decline at Zumiez, said Jennifer Black of Jennifer Black & Associates.
Looking beyond June, Black said even though comparisons are likely to get easier, she anticipates most retailers will post negative comps through the fourth quarter of 2009.
Black said this “will be a year, in our opinion, that will go down in the record books as seeing the highest unemployment, record numbers of foreclosures and bankruptcies and large amounts of personal debt.”
As the consumer continues to seek out value, retailers will “evolve and change and be more targeted via the Internet through social networking sites,” and “less focused on billboards and other types of advertising,” she said.
Until then, Pali Capital retail analyst Amy Noblin said retailers would continue “cutting controllable costs, curbing footage growth and operating lean inventory levels, while waiting for the consumer to bounce back.”
“It will be awhile before shoppers return to their previous purchasing habits, if at all,” she said.
But some were slightly more optimistic. Previewing results on Tuesday on a conference call, Stifel Nicolaus & Co. softlines analyst Richard Jaffe said although June will “likely be more challenging than we thought,” inventories are lean, which should limit clearance sales volume.
“A cautious look to June [and] a very defensively positioned retail sector give us some hope for second-half improvement in the trend, and maybe the consumer frustration — a little bit of pent-up demand — could help drive things,” he said.
Despite the muted expectations, the S&P Retail Index was up 6.11 points, or 2 percent, to 310.34 on Wednesday. The Dow Jones Industrial Average reversed earlier declines to finish ahead 14.81 points, or 0.2 percent, at 8,178.41, but the S&P 500 just missed a gain for the session, finishing down 1.47 points, or 0.2 percent, at 879.56.
Late in the day, Eddie Bauer Holdings Inc., which filed for Chapter 11 bankruptcy protection on June 17, said the U.S. bankruptcy court in Delaware had approved its $100 million debtor-in-possession facility with Bank of America, GE Capital Corp. and CIT Group/Business Credit Inc. CCMP Capital Advisors LLC is the stalking-horse bidder to acquire Eddie Bauer for about $202 million in cash.
“What he has done at Vuitton is really exceptional,” said @gameofthrones’ actress Gwendoline Christie on @mrkimjones’ final show for @louisvuitton. “He has rebooted luxury in terms of making it commercial, viable and contemporary. And most importantly artistic. He has never compromised his artistic vision for the sake of commodity.” (📷: @zefashioninsider)
After seeing a demand for men’s wear from its customers, British contemporary women’s wear label @ariesarise has added a men’s wear component and will launch a unisex collection with @mrporterlive. The 20-piece collection includes jackets, denim, logo T-shirts and more with deconstructed ‘90s vibes. Set to launch on January 18, you can shop the pieces on Aries’ website and on mrporter.com. #wwdfashion
“And so spending so much time with a character who thinks like that, inevitability you try and analyze yourself and go back and think about your own demons and dark chapters that you had in your life,” says @thedanielbruhl of his role in TNT’s “The Alienist.” The show, set in the Gilded Age of New York, also stars Dakota Fanning and Luke Evans. Head to WWD.com to read about how 39-year-old Brühl prepared for the role and why he thinks the show is so relevant to today #wwdeye ( 📷: @Eriktanner)
Now that Celine Dion’s collection has topped $10 million in sales, the pop superstar, fashion icon and newly-minted industry player is eyeing growth in Asia. Read the full report by @tiffanyap, link in bio. #wwdnews #celinedion
“My personal philosophy to beauty is paying attention to oneself. I love to be outdoors, lots of fresh air, trying to take care of yourself as best you can. I always notice that comes through,” says Felicity Jones, the global face of @shiseido-owned @cledepeaubeauteus, which launches today. Head to WWD.com to read more about the actress’ love for beauty and how she prepared for her new role in “The Basis of Sex,” playing the young Ruth Bader Ginsburg. #wwdbeauty (📷: @dandoperalski)
Among the familiar faces at @off____white’s show was a surprise figure: Japanese artist @takashipom, pictured here on Wednesday morning. Other show-goers included @jerrylorenzo, who spoke about his upcoming project: a @nike collaboration for back to school, with designs inspired by his childhood on the West Coast. Sitting in the front row were Future, Don Crawley, @miguel and more. See the rest of the photos on WWD.com #wwdeye (📷: Stephane Feugere)
According to @laurentsai, former “Terrace House: Aloha State” cast member, she didn’t know she was auditioning for the Japanese version of “Real World.” “I was telling a couple of my friends and someone’s like, ‘That sounds a lot like Terrace House.’ I was like, ’No it can’t be.’” Turns out, it was. But Tsai isn’t just a reality star — she’s an illustrator who has worked with Starbucks Japan and most recently, she’s dipping her toes into the fashion world. Head to WWD.com to read about her time on the show, modeling and her art. #wwdeye (📷: @danieldorsa)
More changes are coming to New York Fashion Week: Beginning with the spring 2019 collection, @alexanderwangny will move his New York show to June from September, adopting a biannual schedule with collections shown in June and December. Additionally, the @cfda is planning for an official summer/winter fashion season taking place as soon as June and December 2018. Read more about the upcoming changes on WWD.com. #wwdnews #wwdfashion (📷: @slovekinpics)