By  on September 5, 2013

Retailers struggled to get kids into stores as students wrestled with the idea of going back to school last month, leaving most of those reporting with modest August increases.

Among those releasing comparable sales on Thursday, there was general agreement that stores got much of their business late in the month, as Labor Day approached, and only after a combination of vigorous promotions and cooler temperatures established more of a sense of urgency about buying apparel. Thomson Reuters put the mean increase for the month at 3.5 percent.

Among the small sample still reporting monthly results, Gap Inc. fell slightly below expectations, with a 2 percent increase that was just below the 2.2 percent increase tabulated by Thomson Reuters. The Gap and Old Navy brands, expected to grow 2.8 and 1.3 percent, respectively, registered comparable gains of 2 and 1 percent, while Banana Republic, expected to recede 0.4 percent, instead grew at a 2 percent clip.

“We continue to meet our goal of driving consistent positive comp-sales growth on top of last year’s strong performance,” said Glenn Murphy, chairman and chief executive officer of Gap. The 2 percent corporate increase came on top of a stronger 9 percent increase last year, a pattern repeated by other stores, which saw low-single-digit increases versus gains in the mid- to high-single-digit range in August 2012.

Similarly, L Brands Inc., formerly Limited Brands, was up 2 percent against an 8 percent expansion in last year’s month, with Victoria’s Secret ahead 3 percent and Bath & Body Works up 1 percent.

Janet Kloppenburg, analyst and president of JJK Research, noted that, based on Thursday’s comp reports and her own retail checks, business was difficult for those serving younger customers, with multibrand retailers, especially those serving the surf-and-skate market, generally doing better than monobrand retailers.

“If you dissect the Victoria’s Secret numbers, you find that the one area where they had a little softness was in the Pink apparel business,” she told WWD. “That’s a high school or college-age student, in many cases, who you would think would be gearing up with clothes to take back to school. Clearly, and across the board, the back-to-school consumer was very constrained in August, while business was better for those serving the missy customer. And a lot of the business came at the end of the month, a good deal of it during Labor Day weekend.”

Among the possible explanations, she noted, were less discretionary income for teens as their parents recently have favored high-ticket purchases, such as cars and even houses, and the difficulty of replacing the high volume generated last year by the strong growth of colored denim.

“The kid is paying for something that’s new and authentic,” she added. “When it’s something already in the closet or that’s become a commodity, they’re either not buying it or buying it at one of the discounters. With August behind us, September will be more of a test for the missy merchants.”

The strongest performance among those reporting Thursday came from Costco Wholesale Corp., which, excluding fuel, registered a 5 percent increase in its U.S. stores, with softlines the strongest category, comping in the low-double-digits, and apparel and jewelry standouts within the area. With sales of $7.95 billion in August, the final month of its fiscal year, Costco joined the ranks of U.S.-based retailers with more than $100 billion in annual sales, finishing fiscal 2013 at $102.9 billion.

American Apparel Inc.’s comps were up 3 percent, versus 14 percent a year ago, as it struggled with the transition to a new distribution center. The two teen retailers in the sample, Zumiez Inc. and The Buckle Inc., beat expectations with increases of 3 and 1 percent, respectively, and Stein Mart Inc. continued its recent winning streak with a 3.8 percent increase, the second highest among the stores tracked by WWD.

To continue reading this article...

To Read the Full Article

Tap into our Global Network

Of Industry Leaders and Designers

load comments
blog comments powered by Disqus