The clouds over retailing darkened with June’s dismal comparable-store sales results, intensifying worries about the key back-to-school and fall seasons.
Unseasonably cool, stormy weather combined with persistent weak demand and doubts about the economy to produce deep reductions in most stores’ results. As unemployment and gas prices rose — and without the stimulus checks they carried last year — consumers reduced spending on discretionary purchases or eliminated it altogether. When they did buy, shoppers looked for promotions and value.
“June comps were largely disappointing, but not surprising, given the recent spate of negative macro data,” said Lazard Capital Markets analyst Todd Slater. “Winners were helped by ‘trade-down.’ TJX was the big winner.”
The results could put pressure on the b-t-s season, and second-quarter results, said Peter Brown, vice chairman of Kurt Salmon Associates, who added comps should see a lift in September and October as retailers measure volume against the anniversary of the meltdown of the finance and credit markets.
Stores should expect a consumer who shops later and hunts for bargains, Brown said, adding one way to offset huge inventory clearances before the b-t-s/fall season would be to offer “sharper-priced merchandise” with a value focus.
June comps reflected this trend, as consumers again headed to discounters and value-oriented retailers, such as Kohl’s Corp., which fell 5.6 percent, and J.C. Penney Co. Inc., down 8.2 percent, a better showing than the 9 to 12 percent drop the retailer projected.
Among the mass merchants, The TJX Cos. Inc. recorded the best results, with a gain of 4 percent, followed by BJ’s Wholesale Club Inc., which registered a 2.7 percent increase.
The “off-price model” is “well-positioned for the new consumer reality,” Slater said.
Costco Wholesale Corp. and Ross Stores Inc. both had a 1 percent rise in comps, while discounter Target Corp. posted a disappointing 6.2 percent dip.
“Target is very well run, but maybe Target is not the new thing anymore,” Brown said.
Following the Target model, department store rival Kohl’s has been launching “relevant, trend-right” brands, Brown said, which has “resonated with its consumer.”
Despite “the very weak performance that has persisted since December 2008, there were some signs of improvement beneath the surface with a handful of teen and value retailers posting surprisingly healthy gains,” said Michael Niemira, chief economist and director of research for the International Council of Shopping Centers. “These nascent signs of improvement are important since history suggests that consumer spending typically starts off sluggish prior to significant improvement.”
Department stores focusing on value and promotions also showed signs of improvement.
While Neiman Marcus Inc. posted a 23 percent comp slide, its New York-based upscale counterpart, Saks Inc., saw comps slide just 4.4 percent as it shifted a designer promotion into the month from May. Saks still estimates second-quarter comps will decline in the mid-teen range.
Stephen I. Sadove, chairman and chief executive officer of Saks, said combined sales results for May and June give a better picture of how the business is trending, rather than June alone.
“The shift in our designer event [from May into June] obviously significantly helped the comps in June,” he said. “If you looked at the May numbers, they were down in the mid-20s, so the combined May-June results, at minus 15 or so, is a much better indicator. That’s still better than the first quarter. We are certainly seeing better trends as you go into more of a promotional mode. Everyone [at Saks] has a very good attitude and the vendors are working with us. But I don’t kid myself. It’s still a tough retail environment.”
Nordstrom Inc. reported a negative 10 percent comp but improved on its 18.6 percent decline last June, partly because of a pricing strategy that included a price-matching policy and helped it navigate the difficult environment, Thomas Weisel Partners retail analyst Liz Dunn said.
Macy’s Inc. registered a same-store sales decline of 8.9 percent.
My character, Dinah Madani, is just the coolest, [most] badass woman imaginable," says @amberroserevah. The actress stars in @marvel's newest series on @netflix, @thepunisher. To prepare for her role, Revah sat down with Homeland agents to get a real sense of with Dinah's day-to-day life is really like. Read our full interview on WWD.com. #wwdeye (📷: @jilliansollazzo)
A scene from the 91st annual @macys Thanksgiving Day Parade. The parade, which boasts 50 million TV viewers and 3.5 million on-site spectators, is considered one of the largest and most watched parades in the world. (📷: Jason Szenes/EPA-REX)
The circus came to @bloomingdales 59th Street on Tuesday night and lit up Lexington Avenue with acrobatic dancers, death-defying knife throwing, sword swallowing and aerial acts with no net. The 45 minutes of theatrics built up to unveiling the holiday windows depicting @swarovski crystal-encrusted circus pieces and scenes from “The Greatest Showman” – songs from the soundtrack included. See the rest of the photos on WWD.com #wwdfashion (📷: Joshua Scott)
The psychedelic fashion that pervaded the ’60s is back with an exhibit at the @museumofcityny. “Mode New York: Fashion Takes a Trip” chronicles the changing styles from 1960 through 1973 and features designers such as @ysl, @oscardelarenta and more. The exhibition, which is on display through April 1, is organized into four periods: First Lady Fasion, Youthquake, New Bohemia and New Nonchalance. Pictured here is model Pat Bardonella during the Garvey Day Parade in 1968. (📷: @kwamebphoto) #wwdeye #wwdfashion
“People should be a lot more honest in expressing both the dark and light of themselves. We need to give each other the space to do that because it’s the only way we can grow and evolve,” says @noelwells of her new film “Mr. Roosevelt,” which is largely based on her own struggles. Unexpectedly leaving @nbcsnl in 2014 after just one season, Wells felt set back in her self-esteem and career trajectory. She quickly refocused her energy to more personal projects, which led to the completion of “Mr. Roosevelt.” Read the rest of WWD’s interview with the “Master of None” actress on WWD.com #wwdeye (📷: @jilliansollazzo)
@barbrastreisand is giving fans a chance to see her perform up close in a new concert series, which makes its debut on @Netflix today. From behind-the-scenes takes to her concert performance in Miami last December, the two-hour streaming special captures Streisand in her element. Pictured here is the singer/actress photographed for WWD in 1963. (📷: Palmieri Tony) #wwdeye #wwdarchive
@chanel and @pharrell dropped what’s being dubbed as the world’s most exclusive sneakers yesterday. The Adidas Originals NMD Hu, which Williams designed in collaboration with Chanel and @adidasoriginals, has a waiting list of over 120K people who pre-registered online at chanelatcolette.fr –– and only 500 pairs are on sale. The singer predicted the resale value of the shoes could reach $40K. Read the full interview on WWD.com. Link in bio. #wwdfashion (📷: Dominique Maître)
@imanshumpert is diving deeper into his creative endeavors and relaunching his clothing line, Post 90s, and is helping to raise money for the hurricane victims in St. Maarten with a jersey he’s designed with his brother. The Cleveland Cavaliers player talked to WWD about kneeling during the national anthem, working with fashion brands and how he wants to be more than an @nba player. Read the interview on WWD.com #wwdfashion (📷: George Chinese)