It hasn’t been a cakewalk, yet after the final big shopping weekend of the year and the onset of steeper markdowns, retailers are easing out of holiday selling into clearance mode feeling OK about business and ready to bring on spring.

The verdict is a preliminary one, of course, with December sales not being reported until Jan. 7, and about five weeks remaining in the fourth quarter that ends Jan. 31. Not to mention double-digit unemployment and difficulties for consumers getting credit.

However, there’s been a discernible shift in the tone among retail executives in the last few weeks. Many predict improved margins and profits for the fourth quarter even with flattish sales, a consequence of lower inventories and demand. Beyond that, some suggest real and long-awaited top-line growth occurring in 2010, most likely in the second half.

The upbeat outlook stems from a more controlled, less panicky holiday season. On Christmas Eve, “We went home with big smiles on our faces,” said Bloomingdale’s chairman and chief executive officer Michael Gould. “We feel good about the business and the quality of the business we ran. Last year in December we were drastically reducing inventory to get ourselves in a better position for spring. This year we had a very good flow of receipts all season long. We will continue to bring in newness unabated. With new receipts coming in, we have a good opportunity to keep the momentum going.”

“There is certainly a more positive feeling and the sense that we’re back to a normal rhythm” of business, said Pete Nordstrom, president of merchandising for Nordstrom Inc. “We are happy we made our plans.”

Lord & Taylor said it’s already been building up inventory. “Taking a more aggressive stance has paid dividends,” said Brendan Hoffman, president and ceo. “We have been trending in the mid- to upper-single digits. December should end up right there. We seemed to have recovered most of what we lost in the storm” that blanketed the Northeast on Dec. 19.

“Retailers have tight inventories. So do the brands, so there is not a lot of chasing,” said Ron Frasch, Saks Inc.’s vice chairman and chief merchandising officer. “There are certain areas you can chase, but pretty much across the board it’s not so easy in the first quarter. You can cash in on some ideas in the second quarter.”

Kathy Bufano, president of merchandising and marketing for the usually reticent Belk Inc., based in Charlotte, N.C., said the department store is ahead of plan and had “a really, really strong” holiday, particularly in men’s polo shirts, sweaters and sport coats, women’s dresses and boots, and fine jewelry, especially whimsical pendants and diamond studs. Denim was a surprising gift item this year, Bufano added.

“Our inventory is very in line and even a little light. It’s a huge improvement from a year ago. Based on that, we feel really good about spring,” she said.

American Apparel Inc. founder and ceo Dov Charney said that this year’s buy-one-get-one hosiery promotion was successful, but something the company wouldn’t typically turn to, given American Apparel’s dedication to all-season, basic mainstays like T-shirts.

“The market is stabilizing, we’re feeling very good compared to last year,” said Charney. “I would say we are in fair condition inventorywise.”

“November and December were so strong for us,” said Susan Davidson, ceo of Scoop. “I see them as a harbinger for 2010. We received quite a bit of pre-spring at the end of November and December. We are starting to sell resort product.”

Rain and a little snow did affect Boscov’s, the Reading, Pa.-based department store chain, the day after Christmas. “It was not a plus day,” said a spokesman. ”But it was a successful season. While it wasn’t plus volume, it was volume at a very high level,” meaning less discounting. “We are predicting to be right on our inventory plan. We won’t have problems liquidating in January and February.” As far as sales next year, “We see a gradual improvement.”

One note of caution did come from a chief merchant who requested anonymity: “The results in most cases are going to be better. Everyone has less inventory to dispose of. That doesn’t mean people are all going to be making money. There’s hundreds of millions of dollars of volume that doesn’t exist anymore.”

In a breakdown of sales by product and store type, SpendingPulse, an information service provided by MasterCard Advisors that estimates total U.S. retail sales by cash, check or credit card, found that specialty apparel made “something of a recovery,” finishing down only 0.4 percent from Nov. 1-Dec. 24, and up 2.3 percent since Black Friday. Women’s apparel overall was down 0.3 percent for the season, and up 1.5 percent since Black Friday.

In other categories for the season, men’s apparel grew 3.9 percent; footwear rose 5 percent, and electronics increased 5.9 percent. Jewelry was volatile, but came out up 5.6 percent.

“I think we had a decent holiday season,” said Kamalesh Rao, director of economic research at MasterCard Advisors Spending Pulse. “There was a cautious return to spending, some numbers look pretty strong, tempered by last year’s pretty terrible holiday season. In general, there was modest growth. The spending environment probably stabilized with some signs of life. E-commerce is the story of the holiday season. It says more about shopping habits and little about the spending environment. People are a lot more comfortable shopping online.”



SpendingPulse estimated e-commerce sales rose 15.5 percent from Nov. 1 to Dec. 24, and 18 percent since Black Friday.

From Nov. 1 to Dec. 22, online spending reached $22.5 billion, a 4 percent increase over 2008, which was down 3 percent versus the year prior, according to comScore Inc. Because online spending typically slows in late December, the firm does not report final seasonal numbers until early January. The biggest shopping day online this year was Tuesday, Dec. 15, the second Tuesday in December, with $913 million spent.

“We bet the economy would come back and it really worked out for us,” said Aaron Magness, Zappos director of brand marketing and business development. Zappos built out its categories and did not cut inventory.

At Shopbop, resort, holiday dresses, and boots were big sellers. The contemporary store sold more than in 2008 and did not offer the one-day discount codes it resorted to last year. The store started seasonal markdowns Dec. 1. But Dec. 16 and 17 were “huge” days for the retailer, whose cut-off for guaranteed ground shipping was Dec. 18. Shopbop redesigned its site in July and now offers the ability to shop by style. Shopbop and Zappos are owned by Amazon.

At Venture Commerce, which runs online stores for brands such as Ella Moss and Geren Ford, holiday sales were about 30 percent up over last year, said ceo Sukant Jain. “We saw a broad decline in 2008 sales, which stayed at a plateau for most of 2009” until the holiday season. The spike in November and December did not come “without sacrifice,” however. “Promotions and value have been the necessary catalysts for sales,” he said.

At Neiman Marcus Direct, the biggest day was Tuesday, Dec. 15. Boots, novelty gifts, Neiman’s-branded food and cashmere were the bestsellers, said president and ceo Gerald Barnes.

Across the Neiman Marcus Group, shoes, cashmere and anything with sequins were selling strong.

“It was a big weekend,” said Nordstrom. “We don’t break any price in men’s until the day after Christmas. It builds up a lot of demand.”

The day after Christmas, people crammed major shopping streets and suburban malls in a surge that seemed surprising considering the tepid tone of the holiday period overall, and the nasty weather. Retailers reported strong traffic and volume on plan for the day, generally, though not of the magnitude of Black Friday or enough to move the needle for the season. New York’s Fifth Avenue, like much of the Northeast, was a wet, sloppy sea of shoppers dodging umbrellas and skipping over puddles to get into gift destinations like Disney, Tiffany & Co. and Abercrombie & Fitch.

Bloomingdale’s and Macy’s too were among the most crowded stores, while Saks appeared most busy on its main floor, the contemporary floor and in shoes on eight.

“It was so busy on our shoe floor that we actually had to close it for awhile to reorganize the assortment,” Frasch said. “It was a good day, a strong day.”

The week after Christmas, Frasch said, “is important. It probably shouldn’t alter the month [significantly], but if you are doing well, you can enhance your performance.”

Shoes, handbags and men’s wear have been pacing the business, Frasch noted.

Michael Celestino, executive vice president of store operations for Barneys New York, said business “definitely picked up in the days prior to Christmas and the trend proved to continue post-Christmas as well.”

As a result, he said, “We should achieve our projections for the month, and we still have a few days left. But at this point, all is well.

“The next big test will be once we’re out of clearance mode and back to full-price selling,” Celestino said. “We’ll see how the customer reacts. But, so far, the reaction of new receipts has been positive.”

Malls in New Jersey and New York, including Queens Center, Cross County Shopping Center in Yonkers, and Paramus Park, N.J., were all busy. Southern California however, remained the most challenged for traffic, and there was some disruption in the Midwest where snow fell. Still, Caruso Affiliated spokeswoman Jennifer Gordon said the development company’s retail properties, including The Grove and Americana at Brand, both in the Los Angeles area, saw a 20 percent increase in traffic Saturday.

Taubman Centers reported traffic and sales at many of the malls its operates were strong with most people — 65 to 85 percent of the shoppers depending on the mall — buying rather than returning or exchanging items. Apparel and electronics were the two biggest selling categories.

“Inventories are lean, and spring merchandise is on display at a number of stores. Most stores surveyed were trending up for the day versus the day after Christmas last year as of 2 p.m., Saturday,” said a Taubman spokeswoman.

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