Byline: Jennifer L. Brady
NEW YORK — The final tally is in: Retailers realized slim December sales gains, leaving many with inventory gluts heading into spring and battered bottom lines for the fourth quarter.
Department stores, led by Sears Merchandising Group, The Bon-Ton and Kohl’s Corp., generally performed better than specialty chains and discounters, where promotions and weakness in apparel sales were more glaring.
But among specialty chains, all was not gloomy. Ann Taylor Inc., as reported, had a 22.1 percent jump in same-store sales. The Talbots Inc. posted a 12.1 percent same-store sales climb. Both reported minimal promotional activity in the month.
At higher-priced specialty stores, the results were also positive. Same-store sales at Neiman Marcus, Bergdorf Goodman and Henri Bendel were up in the mid-single digits. Bendel’s gain was “clearly the best in its history,” the company said.
In the discount field, Wal-Mart Stores once again outpaced the competition, scoring a 6.8 percent same-store sales gain overall, and a 9.4 percent same-store gain for its discount stores alone. Dayton Hudson’s Target division posted a 6.8 percent comparable-store gain.
Still, for the industry overall, “Fuller-than-desired inventories required significant promotional markdowns to achieve even such mediocre performance,” said Thomas Tashjian, analyst at First Manhattan,
He noted that apparel profits will be flat and that apparel inventories are still heavy and likely to add to “the traditional level of losses” in January and February.
Spiegel’s vice chairman, president and ceo John J. Shea, said, “Demand for cold weather items improved in December, particularly at Eddie Bauer. However, the stronger response was offset by a higher level of promotional pricing.” Total Spiegel sales were up 5 percent to $475.2 million.
Edward Johnson, Johnson Redbook Service, noted that December “was the most promotional season in memory, resulting in downward pressure on retail company earnings.”
Federated Department Stores Inc. posted same-store sales gains of 2.2 percent in December, with the month highlighted by gains in designer and moderate sportswear, special sizes, special occasion and moderate dresses.
Federated’s chairman and chief executive officer Allen Questrom, said, “While we are pleased with the 3.6 percent comparable-store sales increase produced by Federated divisions in the November-December period, we were disappointed with sales in the month of December itself.”
Total sales increased 34 percent to $1.8 billion, reflecting sales of $365.3 million from Macy’s since the Dec. 19 merger.
Same-store sales at Sears Merchandise Group grew 7.9 percent. Total sales rose 8 percent to $4.89 billion. Sears chairman and chief executive officer Arthur C. Martinez said the sales gain was driven by cosmetics, fine jewelry, fashion accessories, women’s ready-to-wear and men’s casual apparel. He added, “The month followed our plans, with an anticipated last-minute surge in sales coming the few days before Christmas.”
At Bon-Ton, same-store sales increased 6.4 percent. Hot items were cosmetics, women’s apparel, and petites.
Kohl’s same-store sales advanced 7.6 percent.
At J.C. Penney Co., same-store sales moved ahead 5.4 percent and total sales rose 5.5 percent to $2.8 billion. Several categories that stood out included women’s, juniors, large sizes, petite and misses’ sportswear and cosmetics, jewelry and accessories. In the catalog division, women’s career apparel and fine jewelry were solid performers.
Millard’s Department Stores Inc. reported same-store sales were up 5 percent while total sales advanced 8 percent to $985.9 million.
Same-store sales at May Department Stores Co.’s department store division were up 5.5 percent and total sales grew 8.5 percent to $1.9 billion.
Boosted by its Target stores division, same-store sales at Dayton Hudson Corp. gained 3.7 percent. Mervyn’s fell 4.7 percent while comparable-store sales at the department stores edged up 2.7 percent. Total DH sales grew 9.6 percent to $3.7 billion for the month. Citing strength in women’s casual and special size sportswear and misses suits and dresses, Carson Pirie Scott & Co. reported same-store sales were up 2.9 percent. Total sales were nearly flat at $221.6 million. The company also noted that men’s and women’s fragrances were “particularly strong sellers.”
Among specialty chains, same-store sales decliners included Chico’s, 18.3 percent; The Clothestime Inc., 17 percent; and Charming Shoppes, 8 percent. The Limited Inc., 4 percent; Eddie Bauer stores, 4 percent; Designs Inc., 6 percent, and American Eagle Outfitters Inc., 2.9 percent. Same-store sales at The Gap Inc. were flat, while total sales jumped 12 percent to $665 million.
The Limited Inc. women’s businesses — excluding Victoria Secret — recorded a low, double-digit decline in comparable-store sales for the month, while its non-women’s businesses recorded gains of the same size.
However, The Limited Stores was the only part of the company’s women’s business that failed to hit its December sales plan, as comparable-store sales skidded in the mid 20s, but merchandise margins firmed up.
Same-store sales fell in the mid-single digits at Express, and in the mid-teens at Lerner New York. Merchandise margins were up strongly at Express and flat at Lerner. At Lane Bryant, sales were up in the low single digit range. Total company sales rose 6 percent to $1.483 billion.
Victoria’s Secret stores beat its plan with low-teen percentage gains in same-store sales and merchandise margins “comparable to last year’s high level,” a Limited spokesman said. Meanwhile, sales at Victoria’s Secret catalog climbed in the low 30s with merchandise margins flat.
The Limited’s Bath & Body Works division also chalked up strong sales.
Many of the big discounters did poorly. Same-store sales at Bradlees slumped 7 percent, The Caldor Corp. was off 2.5 percent, and Venture Stores Inc. dipped 1.2 percent.
Kmart, however, posted a 3.2 percent same-store gain at its discount stores. Total sales were up 7.3 percent to $5.5 billion.
Ames Department Stores Inc., which posted a 4.8 percent increase in same-store sales, noted that “softlines sales were better than plan and last year; men’s and children’s apparel sales in particular were significantly better than last December.”
Among the off-price chains, same-store sales decliners included The Dress Barn Inc., 3 percent; Filene’s Basement Corp., 1 percent; Ross Stores Inc., 2 percent, Value City Department Stores Inc., 3.2 percent. TJX Cos. had flat same-store sales.
Despite the lackluster sales results, most retail stocks were up Thursday in a relatively flat market.
Dayton Hudson was up 1 1/8 to 71; Kohls, up 2 to 41; and Mercantile Stores, 1 1/8 to 41.
Those with fractional gains were Ann Taylor, 5/8 to 34 7/8; Caldor, 1/8 to 21 3/4; Dillard’s, 3/8 to 25 5/8; Federated 1/8 to 19; The Gap, 3/8 to 30 5/8; J.C. Penney, 1/8 to 42 3/4; Kmart 1/8 to 13 1/2; The Limited, 1/8 to 18; May Department Stores 1/2 to 33 1/2; Nordstrom, 1/8 to 42 1/4; Value City Department Stores 1/8 to 8 3/8; Wal-Mart, 1/2 to 22 1/8 and Woolworth, 5/8 to 16 3/4. Sears, which had strong same-store sales, slipped 1/8 to 47 3/8.