By  on June 1, 1994

WASHINGTON -- Retailers were upbeat about business in general for the second half and positive about apparel in particular at the annual International Mass Retail Association convention here last week.

Some executives said they are giving increased space to apparel in their store renovations. Dresses, although still an infant category in the mass market, have done surprisingly well this spring in an arena better known for its emphasis on casual basics and commodities. T-shirts and denim shorts were not left behind, however, and were also cited as strong performers.

Many executives reported that the first quarter was solid, and while cooler temperatures chilled sales in late April and early May, they were hopeful that more temperate weather would translate into increased sales.

"Everything we see points to women's wear getting better this year," said Donald G. Soderquist, vice chairman and chief operating officer of Wal-Mart and chairman of IMRA, whose convention was at the Sheraton Washington Hotel.

Lagging apparel sales were partly to blame for a disappointing first quarter for the giant discounter, which reported earnings up 10.6 percent and sales up 27.1 percent. While respectable, the figures were below Wall Street expectations.

Soderquist added that the company's ventures in Mexico were doing well, and that Mexico is a logical stepping stone to Central and South America, particularly as Wal-Mart gains more expertise with the Hispanic population.

As for China, where Wal-Mart chairman S. Robson Walton recently explored the possibility of opening stores, Soderquist said it is a "very new and different market," and added that the company needs to do more research before considering units there.

"We expect our Canadian business to do really well," he said, referring to Wal-Mart's acquisition this year of Woolworth's Woolco operations there. "But there are a lot of big companies that have huge operations in other countries. We're still pups in the international business."

Marc Balmuth, president of Caldor Corp., Norwalk, Conn., said the first quarter was good, but the past few weeks were "a little difficult."

"The dress business has been very strong," he said, citing rayon fit-and-flare, vintage and palazzo styles as leading the pack.Overall, Caldor expects comparable-store sales gains in the mid-single digits, with the women's apparel area registering slightly higher gains.

Pamida Discount Centers, Omaha, Neb., is increasing its apparel to 40 percent of total space from 25 percent. It's a significant part of the company's strategy, which includes a new prototype to be rolled out this year.

Steve Drexler, vice president and divisional merchandise manager for women's softlines, said the women's business has been strong and fabric driven. Silks, in solids, short sleeve and sleeveless styles, novelty silk with fringe, rayons and denim have been hearty performers.

Drexler said plus-size business has been a key area, and is running at about 40 percent of the total misses' and juniors business. Traditionally, this category averages about 16 percent of women's sales, he said. It is especially important in areas where there is an older population, as is the case in many of Pamida's markets in Iowa, North Dakota and South Dakota.

Pamida is making a push toward increasing total softlines to 30 percent of business within five years. It was about 21 percent in 1992, and grew 1.5 percent last year. The women's area in the prototype stores is generating 25 to 26 percent of sales, against 16 to 17 percent in the older stores.

Areas for growth, he said, include plus sizes, girls and pre-teens. Drexler added that the women's area should experience same-store gains of 20 percent or more, as the stores are remodeled. The company plans to have up to 30 prototypes in place by January.

Celia Clancy, vice president and general merchandise manager of women's softlines for Bradlees, Braintree, Mass., said misses' casual sportswear has been the strongest part of the business, and projected low single-digit comparable-store gains for the second half of the year.

"Casual knits, in soft shades, neutrals and white -- not brights -- have been strong, as well as denim shorts, bike shorts, baby doll dresses and knit column dresses," she said.

Skip Chustz, senior vice president of apparel for Shopko, Green Bay, Wisc., said dresses, particularly rompers and vintage looks were "exceptional, and all plus business, since we didn't carry them last year." The rest of the year should reap same-store gains greater than 10 percent in women's apparel, and Chustz said the company's in-store marketing strategy will devote more energy to presentation in the women's area.Chuck Siegel, ceo of 50-Off Stores, San Antonio, Tex., said he expected gains of less than 10 percent in women's sportswear.

Dennis Barrington, 50-Off's senior vice president, said bodysuits, washed silk, rayons and anything embroidered with beads, as well as denim sleeveless tops, stripes, and belted denim shorts in longer lengths are doing well. Nylon windsuits with long pants and with shorts are performing in the Southeast.

At Jamesway, the Secaucus, N.J.-based discounter that expects to emerge from bankruptcy in the fall, Bob Greenwald, senior vice president and general merchandise manager, said the first two weeks of May were difficult because of the cooler weather.

"The first quarter was good, and apparel was very good," Greenwald said. "Business is improving, and we expect gains of 6 to 7 percent over the next six months. Our remodeled stores are gaining about 10 to 12 percent in apparel."

He said pocket T-shirts, bike shorts and denim shorts had been recent strong sellers.

Jack Smailes, executive vice president of Hills Department Stores, Canton, Mass., said women's business has been good.

Jeans continue to be strong, and the company has seen some growth in cotton sweaters, a new category. The company has opened petites departments and will be expanding the concept. A new arrangement in the stores will expand the area to three sections of apparel from two, and redistribute space. Coat and dresses have been tightened in favor of other categories, like sportswear.

Smailes said the company had double-digit same-store gains in the first quarter. He said he would be happy to see high-single or low-double-digit increases for the second half -- "a lot depends on the weather."

Rob Voss, executive vice president of merchandising for Dollar General, Nashville, Tenn., said the women's division nearly doubled sales in the first quarter to contribute to a record period.

Overall, he said same-store sales were up 15 percent in the quarter, and he expected the rest of the year to be strong as well. Women's comparable-store sales should be up 15 percent for the year. He attributed the strength to keeping a good stock in basics, and the fact that the company has been increasing its direct importing. It should grow to about 28 percent within a year, he added."We've focused on presentation and cleaned up inventory," he said. Key items include windsuits and warm-up suits at $20, matching shorts and tops sets in bright printed rayon and in denim, as well as printed wovens.

Peter Thorner, president and chief operating officer of Ames Department Stores, Rocky Hill, Conn., said the first quarter was strong for accessories, intimate apparel and basics. Jeans sold well, but the rest of casual sportswear was soft. Overall, he said, the company is focusing more on ready-to-wear, especially knits, outerwear and sweaters, and he looks for a 4 to 5 percent gain for the rest of the year.

George Jones, president and ceo of Rose's Stores, Henderson, N.C., said that since the chain has revamped its apparel strategy, it is registering comparable-store gains of 15 to 20 percent. It is working through a bankruptcy reorganization, and said the second half should be very strong compared with last year because the stores were severely out of stock due to the company's financial woes. Rose's filed Chapter 11 in September 1993.

Rob Gruen, senior vice president of merchandising for Rose's, said the assortments are now more fashion forward, including vests, silk shirts, colored denim and licensed character products. There is less emphasis on basics.

"We've brought a lot of our sourcing back to the U.S.," he said. "Two years ago, a majority of it was offshore, but we're turning it around. Direct imports are down by more than half. Domestic sourcing gives us much more flexibility."

Jones added that Rose's is buying closeouts now. That category is expected to be 25 percent of apparel business this year, and it's all plus business since it was not carried last year.

"The key is taking money from import programs and putting it into closeouts and domestic programs," he said.

Jones pointed to denim, woven tops, knits, plus sizes, short-sleeved silk shirts at value prices -- $7.99 -- and Disney and Looney Tunes licensed tops as areas of growth.

He also credited the Doneger Group buying office for color and style direction and for its influence in repositioning the apparel business.Dave Daniels, president and chief operating officer of Penn-Daniels, Quincy, Ill., said that as the weather has cooperated, business has picked up. Denim shorts and rayon blouses have been key items. "Large sizes have been very good, with double-digit gains over the past two years," he said, "mainly because you can get fashion in this area now." Large-sizes account for 20 percent of total apparel sales.

Women's business was flat last year because of the Midwest floods, and he said he expected to see growth of 7 to 10 percent in same-store sales in the women's area.

Accessories and sportswear were the bright spots at Prange Way, DePere, Wis., according to Steve Katkin, executive vice president. Same-store gains in women's should be about 3 percent, he said.

Recent bestsellers include basic, printed and novelty T-shirts, and shorts in denim, sheeting and poplin. Growth is expected in woven tops and sweaters, a category that was soft, but which Katkin thinks will rebound.

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