Retailers reporting same-store sales today are likely to turn in another round of weak results as cool weather, persistent unemployment and a shift of tax-free holidays into August plagued the month of July.
Even the arrival of new back-to-school merchandise failed to excite consumers, most analysts said.
“July sales are likely to be weak due to sharp markdowns on clearance items and, in some cases, more limited inventory to clear, as well as cooler-than-normal weather for the month, that pared seasonal demand,” said the International Council of Shopping Centers chief economist Michael Niemira. “ICSC Research continues to expect industry sales for July to be off by about 5.5 percent with leaner clearance than last year hurting the reported sales pace.”
Two specialty stores releasing comps after the market closed on Wednesday, Hot Topic Inc. and Zumiez Inc., reported dips in July comps of 8.5 and 16.8 percent, respectively.
In a comparable-store sales preview call, Stifel Nicolaus retail analyst Richard Jaffe said the shift in tax-free weeks in most markets from July last year to August this year will likely “handicap July” and “possibly benefit August.”
But, he said he remained “pretty guarded….I think it’s going to be a tough fall.”
Off-price retailers, however, should be less affected by the tax-free shift, MKM Partners analyst Patrick McKeever said.
“Lower gasoline prices, lower utilities bills and a late-July increase in the federal minimum wage should have provided some offset” from the tax-free shift for discounters and dollar stores, he explained.
Still, analysts largely predicted July comps to be more similar to June, and looked ahead to August and September.
August results are expected to be hurt by the later timing of Labor Day versus a year ago, which is seen pushing some b-t-s spending into September.
“August should pick up the shift, but then be negatively impacted by the Labor Day shift into September,” said J.P. Morgan retail analyst Brian Tunick. “We are just a month away from the start of the two-year negative [comps] for the retailers. September comps will be the first real evidence if the bulls’ top-line recovery thesis is taking hold.”
Retail stocks slipped Wednesday, with the S&P Retail Index off 0.4 percent, or 1.37 points, to 355.72. Some chains bucked the trend, including Christopher & Banks Corp., up 4.5 percent to $8.64; Zale Corp., 4.2 percent to $7.21; Nordstrom Inc., 3.1 percent to $27.96, and Urban Outfitters Inc., 0.5 percent to $24.56. (For more on Wednesday’s stock activity, see page 18.)
In the broader market, the Dow Jones Industrial Average fell 0.4 percent, or 39.22 points, to 9,280.97, despite a strong showing from financial stocks. Three of the best-performing stocks for the day were American International Group (up 62.7 percent), Freddie Mac (31.2 percent) and Fannie Mae (29.8 percent). All three are controlled by the government after bailouts during last year’s financial crisis.
London’s newly opened @designmuseum will look back on the life and work of Azzedine Alaïa in a show that the designer helped to curate before he died of heart failure last month. The retrospective, which Alaïa had worked on with Mark Wilson, chief curator of the @groningermuseum, will look at the impact of his work worldwide. The show, “Azzedine Alaïa: The Couturier,” will run from May 10 to October 7. Read more about the exhibit on WWD.com #wwdnews #wwdfashion (📷: @zefashioninsider)
@Pharrell and his wife Helen Lasichanh were among the stars that came out to celebrate @rimowa’s first pop-up concept shop. The space, which is located on Rodeo Drive in Beverly Hills, draws inspiration from airport luggage carousels and lounge areas – and features the company’s luggage and accessories. If the pop-up is successful it could pave the way for addition temporary shops throughout the world. #wwdfashion (📷: Owen Kolasinski/BFA)
@carineroitfeld celebrated @crfashionbook’s first calendar last night with a dinner party at Spring Place in Manhattan. Photographed by @stevenkleinstudio, the calendar takes on a fitness theme and features @joansmalls, @gigihadid, @danielle_herrington_ – pictured here – and more. “[Carine Roitfeld] wanted me to feel sexy and she wanted me to be myself and feel it out on my own and do what I felt was right,” said Herrington, aka Miss October. #wwdeye
@saintrecords and @virgilabloh last night at @americanexpress’ “A Night With Success Makers” event. “I always bring it back to community because without that I wouldn’t have the courage,” said Knowles when asked how she has gotten where she is now. Read more highlights from their conversation on WWD.com. #wwdeye (📷: @lizdoupnik)
This Just In: Industry sources have told WWD that Anastasia Soare is rumored to be considering selling her beauty business, @anastasiabeverlyhills. According to those sources, Soare has tapped investment bank Imperial Capital to explore sale options for her eponymous beauty brand –– and with at least $340 million in net sales, this would be a big deal. Put in context of other recent transactions for makeup companies, Soare’s price tag could be in the billions if she were to sell the whole thing. #wwdnews #wwdbeauty (📷: @clint_spaulding)
@assouline’s latest book, “The Spirit of Bentley: Be Extraordinary” captures the adventurous attitudes and opulent lifestyles of @bentleymotors’ most creative owners and enthusiasts throughout the U.K. The 292-page hardcover has a section dedicated to showing its team of skilled artisans and photos of its most colorful owners, from George Bamford to designer @alicetemperley, pictured here by Aline Coquelle. #wwdeye
@google released its report on the most popular search terms this year. For fashion brands, the list was led by @gucci, the luxury brand that stunned the market last October when it pledged to stop using fur. Runner ups were @supremenewyork and @fashionnova, along with more established brands like @louisvuitton, @chanelofficial and @ysl. #wwdfashion (📷: @aitorrosasphoto)
In yet another fashion show shuffle, @elleryland is moving its show in sync with the Paris couture calendar — though the brand is still keeping one foot on the city’s ready-to-wear schedule. Their runway show in January will coincide with the launch of a new strategy: designing two main collections each year instead of four, which will then be released in four drops. “As we all know, the system needs to change. We need to show sooner to give time back to artisans and designers to do what they do best — create,” said founder Kym Ellery. #wwdnews #wwdfashion (📷: @kukukuba)
@maxmara’s classic 101801 coat was the cornerstone of its pre-fall 2018 collection. The design team expanded the traditional double-breasted, kimono-sleeved style into a trapeze coat, lean belted styles and a peacoat and presented them in monochromatic looks – like the camel one pictured here. #wwdfashion #prefall18 (📷: George Chinsee)