LATE EASTER STALLS SALES
STORES STILL WAITING FOR SPRING'S BIG THAW

Byline:

NEW YORK--Even though today is the first full day of spring, the season could be a little late this year.
For months, numerous executives have been predicting that a turnaround in apparel retailing would occur for spring. It has to come sometime, they reason, and they figured that the new, tighter silhouettes and more colorful styles would spur shopping.
It really hasn't happened yet. March sales have been spotty, and with Easter falling later this year, there's little hope for much of a pickup this month. Easter Sunday fell on April 3 last year. This year, it will be observed on April 16.
Several retailers have noticed an improvement in business over the past seven to 10 days due to warmer weather, particularly in bridge and better lines, more forward styles and special sizes. They are, in many cases, trying to limit markdowns, which could help margins but cut volume.
The mood is as uncertain as ever.
"With the weather, it's difficult to judge," said Michael Steinberg, chairman and chief executive officer of Macy's West/Bullock's, on Monday. "There was a window of a couple days with good weather where sales were better, but it's hard to say."
Cool, rainy weather in Northern California, where Macy's West rings up 60 percent of its business, has shoppers uninterested in spring fashions. Steinberg said the week of March 20 is critical because of the store's spring sale and the arrival of a spring fashion catalog.
"The fallacy is that there's going to be some magical thing happening for spring," said Jerry Magnin, owner of the Magnin Co. Inc. and Polo/Ralph Lauren Beverly Hills. "They're living in a dream world. Apparel has been around too long to have explosive growth in one season. We're not inventing something new."
Instead, Magnin said, retailers should expect slower, steady growth of 3 to 7 percent year-round, including spring. Magnin said his early spring business was in this range but that women's was brisk because of a well-designed, easily understood collection from Lauren.
Since Christmas, retail business in general has been largely a disappointment. There was a pickup with clearance sales in January, but February, considered a bellwether for the spring, was as disheartening as the holiday season. Retailers exited 1994 with inventories growing faster than consumer demand. According to Management Horizons, apparel inventories are up 3 percent, while demand is just 2 percent higher.
Last month, most major chains reported either flat results or declines. Neiman Marcus Group's same-store sales dipped 1.2 percent; The Gap had a 1 percent drop; Charming Shoppes tumbled 22 percent, and J.C. Penney gained only 1.4 percent. March--when spring sales usually start to pop as the temperatures climb--is hardly any better, even with some pockets of strength. "Between February and March combined, we're not where we'd like to be, versus our plan," said Carey Watson, senior vice president of marketing of Burdines, Miami. "There's kind of been some ups and downs. Some businesses are doing well and others aren't.
"I don't know what April is going to hold," Watson continued. "We came out of December and January so strong, then we were disappointed in February and March is OK. Was February just a blip?"
At Jacobson Stores Inc., senior vice president George P. Kelly said there have been fewer markdowns on the floor this year than last year.
"That probably has hurt volume, but will probably help gross margins," he added.
"Business is outstanding in the designer area and very good in the updated area," Kelly said. "The classics area, possibly because of the markdowns, has been a little slower in getting started. Our business has been good where it is a little more forward in terms of taste level. The more traditional, classic parts of the Jacobsons business is not as strong.
"I don't think [the turnaround] has come to pass yet," Kelly said. "For the second year in a row, spring has come later to southeast Michigan."
Steven Siegel, chief financial officer of Filene's Basement Corp., said he believes spring cannot be judged until Easter's sales are tabulated next month, but he said results to date have been slower than most retailers would have liked.
"February certainly wasn't good and I don't think anybody is expecting March to be particularly good with the [later Easter]," he said. "Until we get through the month of April, we're not really going to know what kind of spring we've had."
Siegel said the slow start to spring this year is similar to 1980, 1987 and 1990.
"We do believe that it is cyclical and at some point something will catch the attention of shoppers from a fashion standpoint and bring them back in," he said.
At Venture Stores, Julian M. Seeherman, chairman and chief executive officer, said business in "January was terrific, February wasn't as good and March has been up and down."
"We really had a burst of spring [last week] and because of that our business has opened up," he said. "It had not opened until then."
Seeherman said he believes it's too early to write off the season and that Venture is still looking for a good spring. He agreed, however, that sales to date have not been strong enough to characterize it that way.
"I think a lot of us had such a tough spring last year that we said, 'Anything that's normal ought to be better,"' he said. "So I think we feel more optimistic."
Wall Street analysts, however, sounded a cautionary note.
"I heard there was some good selling over the weekend, but overall, apparel sales will continue to be difficult," said Todd Slater, a retail analyst with UBS Securities. "The general rule is that the late Easter should bode well for regular-priced selling and earnings because you're less promotional than you were at the same time last year. You're pushing the promotions two weeks later, selling more goods at regular price."
As reported in WWD Monday, analysts expect tough times ahead for retailers, with only a handful of chains seen exceling this year, among them Ann Taylor and Talbots.
Some retailers are leaving little to chance.
Macy's dropped a 92-page spring sale catalog that boasts extra-savings coupons and bonuses on some already-reduced prices. For example, a Jennifer Moore private label linen blazer was $49.99, reduced from $79.
One retail analyst said: "Federated has taken big reserves in their own earnings for markdowns going forward, so they can afford to be more aggressive if they want to. They already took the charge--potentially hundreds of millions of dollars--in previous quarters. They announced they will continue to take more charges."
A spokeswoman for Federated Department Stores said, "We're seeing the biggest strength in better sportswear. The basic elements that are pulling women in are new silhouettes. They are a big shift from the loose-fitting garments we had been seeing. Now we're seeing more shape, and that style is having a very positive effect."
"March started slowly, but when the weather changed about 10 days ago, we saw a significant improvement in our business, particularly in apparel," said Stanton Bluestone, president and ceo of Carson Pirie Scott. "The problem we have with March is that we're changing a major promotion because of Easter, so March is going to be down and April is going to be up. However, if the weather says mild, I see no reason why we can't make our plan in March and look forward to a reasonably good April."
Bluestone said better sportswear and the special size areas have been strong, as has the company's dress and suit business. Juniors, on the other hand, have been off to a slower start.
"What we're selling is Jones New York, JH Collectibles and Liz Claiborne, both in the casual and career areas," Bluestone said.
Brian Kendrick, vice chairman of Saks Fifth Avenue, said March business is up almost 20 percent over last year, while year-to-date business is up 13 percent.
"Knock on wood, we're having a terrific period, although we're hearing from the market that some people are struggling," Kendrick said.
American retailers in Paris for the rtw shows said they are having a good spring season for women's apparel so far.
"Our rtw business has been running ahead of plan for February and March," said Michael Gould, chairman and chief executive officer of Bloomingdale's. "February was just incredible, and we have had solid single-digit increases in women's apparel for March."
Gould said the regular priced business is "stronger than it's been in the past three and a half years."
He said that bridge selections were "very strong," posting gains of 20 percent this season compared to spring 1994. He also said the special sizes were running 30 percent ahead of last spring. Gould was less bullish on the designer business.
"It's doing OK, but still ahead of last year," he said.
Neiman's spring business is "moving along well," said Burton Tansky, chairman and ceo. "We are exceeding last year's performance, and we are on plan. We are enthusiastic about prospects for the designer and couture businesses. We have had good sell-through where we have had deliveries."
Specialty Retailers Inc., Houston, expected sales to slide 4 percent this month due to the late Easter, but instead is tracking at a 1 percent gain in comparable-store sales.
"I'm pleased with that because I think we'll do a lot of business in the first two weeks of April," said Mark Shulman, executive vice president and chief merchandising officer. "Between March and April, I think we'll have an increase."
Sales raced 30 percent ahead of plan at 32 units that have been opened by Specialty Retailers since March 1 in Louisiana, Arkansas and Mississippi.
"It's exceeding all our expectations," Shulman noted. "We're finding the customer is starved for branded merchandise."
Misses and junior dresses and shoes have been the leading categories at SRI, which sells moderate- and better-priced family apparel.
"Denim as a fabric has been very strong, especially in dresses and jeans," Shulman noted.
Analysts said Wal-Mart Stores last week was helped by warm weather, particularly in shorts, T-shirts and other spring merchandise. The chain's strongest sales came in the Northeast and along the East Coast.
Cocktail dresses, Armani Le Collezioni sportswear and Thierry Mugler suits have been stellar sellers at Stanley Korshak in Dallas, observed Crawford Brock, president.
"We're feeling pretty good about spring and I think this will be another good year for us," he said.
Brock expects April business will be strong due to the late Easter and to the fact that some women's lines haven't shipped yet. He's confident of making the spring plan for an 8 to 9 percent increase in women's apparel. Said Slater of UBS Securities: "If the stores don't panic as they look at their numbers, which will not be strong because of the timing of Easter this year, there is no reason they can't have a more profitable first half than last year. They should get better turns and more regular-priced selling."

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