NEW YORK — Although no one claimed a clear victory, stores on Sunday reported better-than-expected post-Thanksgiving business, which slightly raised hopes about the outlook for the cloudy holiday shopping season.
This story first appeared in the December 2, 2002 issue of WWD. Subscribe Today.
Before roasting their turkeys, retailers were pessimistic. But by the time they started eating the leftovers, they began sensing consumers had an appetite to shop. On Friday, shoppers were lured by intensified retail advertising and the avalanche of early-bird “doorbuster” sales, two-for-one deals, coupons for another 10 to 15 percent off, and credit card discounts.
The cold weather further spurred their shopping mood.
Consumers seemed at last to realize that there are six fewer shopping days between Thanksgiving and Christmas this year to shop. The shortened season has retailers worried, though not that consumers will buy fewer gifts. It’s more that in the process of their holiday shopping, consumers will probably end up buying less for themselves.
Friday’s volumes exceeded plans, which called for gains of just a few points. The gains were large enough to put retailers ahead overall for the weekend, despite often below-plan results on Saturday. Revenues were also well ahead of last year’s post-Thanksgiving weekend, which was brought down by 9/11 and warm weather.
Among the best-selling areas were cold weather accessories, sweaters, gift cards, toys, particularly dolls, and DVDs.
Wal-Mart Stores had a really big day, posting a record Black Friday of more than $1.43 billion in combined sales from Wal-Mart stores, supercenters and neighborhood markets. That beat the previous record of $1.25 billion set last year. Top-selling categories were home electronics, small appliances, and toys, the company said.
“This represents a good start to the holidays and, with the help of our more than one million associates, we look forward to a successful season,” Tom Schoewe, Wal-Mart’s executive vice president and chief financial officer, said in a statement. Wal-Mart had crowds waiting for their doors to open at various locations on Black Friday for “blitz sales” from 6 to 11 a.m. Other retailers pay close attention to Wal-Mart, considering the world’s largest company a barometer for the industry.
“We’re happy with the two days put together for sure,” said Vanessa Castagna, president of J.C. Penney, which opened at 6 a.m. Friday and held a 20 to 50 percent off storewide sale, and promoted early bird doorbusters.
“We’re on plan and feel OK about it,” Castagna said. “Seasonal categories are back on track and our gift strategy seems to be working. We made more of an effort at strengthening our promotional activity and communicating with customers. The message was more urgent.” Generally, the tone among retail chieftains was about as positive as it’s been all year, but still cautious. “It won’t be a bellringer, but it’s not doom and gloom,” said Hal Kahn, chairman and ceo of Macy’s East. “Business in the city was explosive.”
Like many big chains around the country, Macy’s heavily advertised a big “doorbuster” sale. The Macy’s event commenced at 6 a.m. Friday and 7 a.m. Saturday, and offered 50 percent or more off a range of sportswear and accessories until 11 a.m. both days. The store threw in coupons Friday offering 15 percent off, but not on the doorbuster specials, and not on Saturday.
Filene’s Basement held a 4 hour, 15 percent off the entire store event, provided you presented coupons printed in newspapers. Sprint gave away $100 cell phones, that is if you signed up for Sprint’s cellular service, while Barneys New York was more subdued than most stores, running a small New York Times ad for 30 to 40 percent off regular prices on selected merchandise, and another 10 percent off any purchase if you opened a Barneys credit card. Based on current positive trends, Howard Socol, Barneys chairman, ceo and president, said he thinks the store could beat its December plan which calls for a 7 percent comparable-store gain, with price breaks on designer goods coming up this month, compared with last year when they ran in November.
Lord & Taylor advertised its “biggest sale of the season” with 50 percent off sportswear, dresses and suits, whereas Bloomingdale’s advertised 20 to 50 percent savings throughout the store. At Bloomingdale’s, “It was a good two days,” said Michael Gould, chairman and chief executive. “Friday was very good, above plan. Saturday was a tad below plan, within a percent. But for the two days together we made plan and we picked up very strongly on a comp-store basis,” against last year, when retailers were brought way down by 9/11 and warm weather.
“We did not open crazy early, or stay open crazy late, the store was much more navigational, and we had newness. We brought a lot of fashion in, and were able to do the business,” even though, he said, the store decided not to offer discount coupons this year. “We took dramatically fewer markdowns this year,” Gould said. Top-selling categories were cashmere, better men’s, young contemporary and cold weather items and women’s accessories, Gould said.
Still, retailers are a long way from home safe. “I can’t read anything into it,” Gould added. With six less shopping days, he said it’s likely consumers will buy less for themselves. “That’s the problem. I believe, if they have 20 gifts on their lists for friends and family, you are going to get that, but self-consumption is obviously going to be less.”
Best Buy also ran with a six-hour special, hyping DVDS at two for $20. Sears offered zero percent financing on TVs priced $499 and up, and on camcorders $299 and up when you use your Sears card. Some stores took more desperate measures, such as Kmart, which was open for business Thanksgiving Day. On Friday, Kmart opened at 5 a.m. and remained open until Sunday at 10 p.m.
The pattern at Macy’s East seemed representative of many stores. “Business was better than expected,” said Kahn. “Saturday was a little softer than Friday, when the chain beat its plan and when people came in very early to shop. There is no doubt customers were shopping for value.” Outerwear accessories in men’s, women’s and kids, boots, sweaters, jewelry, men’s dress shirts, cosmetics and fragrances did well, spurred by recent product introductions, such as J.Lo’s fragrance called Glow, as did accessories, jewelry and cold weather items. “We beat our plan on Friday and came close on Saturday,” Kahn said, noting that the store dropped a promotion, thereby losing some volume. He called moderate apparel the weakest link. “Those businesses that don’t have enough fashion and newness and only creating value out of price are getting hurt.”
“Retailers are telling us that consumers have been out in full force this weekend, which reinforces our projection of a 4 percent increase in holiday sales over last year,” said National Retail Federation president and ceo Tracy Mullin. “Consumers have shown us time and time again that they are resilient when it comes to the holiday season. Despite a down economy and threat of war, they still plan to purchase gifts, decorate their homes, send greeting cards, and celebrate their traditions. Retailers have acknowledged that-this year-consumers are very focused on price. Consumers can expect fantastic prices from all retailers, not only this weekend but throughout the holiday season.”
NRF projects a 4 percent gain in holiday sales this year over last, bringing estimated revenues of $209 billion, with the average consumer spending $650 this year on holiday gifts, decorations, cards, candy, and food-up from $632 last holiday. The NRF also reported that only 8.6 percent of consumers completed their holiday shopping to date, and that 75.6 percent of consumers were out shopping this weekend.
Analysts projections have been less optimistic, with several saying that discounters might hit the 4 percent mark, while department and specialty stores would be a few points below.
It’s possible that catalogs, which has been “fairly strong” this season, suffered over the weekend, with many people out shopping, according to Tom Holiday, president of the Retail Advertising Marketing Association. However, after shopping the stores, “Some people get frustrated and turn back to catalog and Internet.” Among the type of deals cybermarketers are offering, free delivery, with purchases exceeding $100.
Taubman Centers Inc. had a “fantastic” Friday, said Karen MacDonald, director of communications. “Friday stayed strong throughout the day and evening.” Though Saturday was slower, it picked up earlier this year, 11 a.m., versus last year’s noon.
Among Taubman’s other findings: 70 percent of the shoppers used credit cards; 30 percent cash, and toys were the big story, particularly FurReal Friends cat dolls that purr and move. Other top toys, Rapunzel Barbie, and items based on Spider-Man and Harry Potter, as well as Easy Bake ovens.
MacDonald said the centers felt the weekend was no more promotional than years past, though stores advertised weekend sales, rather than just sales on Black Friday, which is so named because it’s generally a highly profitable day for retailers.
The Simon Property Group said Friday and Saturday were busier than a year ago. At the South Shore Plaza, in Braintree, Mass., Filene’s was up 11 percent Friday and was running 30 percent above on Saturday, while Northgate Mall in Seattle reported department stores had their best Black Friday in years. “There were lots and lots of bags, and the men were out earlier,” said Billie Scott, director of public relations. “Lots of families were shopping together.”
According to reports from Simon malls, cashmere, sweaters, outerwear, fleece, Playstation, new Eminem and Jennifer Lopez CDs, three-stone jewelry, to represent past, present and future, were bestsellers.Though few are confident enough to call this year’s holiday season a success just yet, several West Coast retailers described the start as stronger than last year.
“Traffic is significantly up from last year,” noted Jack Kyser, chief economist of the Los Angeles Economic Development Corp., who spent Friday at the Westside Pavilion mall in West Los Angeles observing shopping activity.
“People are dragging big bags of merchandise,” he said.
Robert Mettler, chief executive officer of Macy’s West’s 120 stores in the region, was also pleased with activity. “It was certainly better than trend,” he said. “It beat our expectations.”
Mettler noted Macy’s junior girls business, which had been selling well during the fall months, accelerated over the weekend. In tops, printed, bohemian or woven were especially sought after. “Anything with interest is driving sales,” he said, noting the exception is jeans which are cleaner and without embellishments such as “whiskers.”
Macy’s coat business, which did not do well last year because of unseasonably warm weather in the region, is selling now not because temperatures are lower, but because details such as faux fur, bell sleeves and embroidery are giving customers a reason to buy, he said.
“We don’t have the sweater coat of a year ago but overcoats worn over denim or other pieces is what’s selling,” said Mettler. Sweaters, on the other hand, are doing just okay, he added. “I wouldn’t call sweaters an out-and-out winner,” he said. “But cashmere has been very very strong.”
Traditional sweaters took a back seat to novelty crocheted knits and sweaters with asymmetric necklines and bell sleeves at Nordstrom’s 88 full-line stores, too, according to Amy Jones, a spokeswoman. Even blouses and shirtings beat traditional sweaters, she said. In designer sportswear, however, cashmere sweaters from Malo, Missoni and Dolce & Gabbana did well with those in pink and green emerging as top picks. “Customers could be looking to resort or spring,” noted Jones, referring to the color story.
Nordstrom’s other bestsellers included shearling and faux shearling outerwear from vendors Andrew Marc, Sheri Bodel and Marc by Marc Jacobs, handbags from Isabella Fiore, and MAC’s mini vials of micro fine glitter to be used over lip gloss or eye shadow.
Promotional gift cards worth between $5 and $100 handed out to the first 350 to 700 customers at each of Mervyns’s 264 units on Friday prompted some shoppers to begin queues outside stores at 4:45 a.m. Inside, two-for-one deals buoyed the sweater category, according Leanne Furman, the chain’s spokeswoman.
Here, too, shoppers gravitated to novelty sweaters, especially cable knits or those that looked hand-knit. Women’s jogging suits, comprised of hoodies and drawstring pants, was another hot item while denim jackets sold better than one of last year’s top-sellers, jeans. In the intimate category, terry cloth robes and fleece thermal sleepwear checked.
“Shopping the day after Thanksgiving seems to be a tradition with our guests,” said Furman. “But by our estimates, volume was higher than it was last year.”
Junior chain Forever 21 with 141 stores in the region saw interest in holiday clothing such as black pants with Lycra and lacy black tops. Velour hoodies and drawstring pants were also hot. Where last year’s sweater coats left off, corduroy and denim jackets picked up while fashionable sweaters with embroidery details and sleeve treatments also checked.
“I was happy with the numbers but it has to continue,” said Larry Meyer, chief financial officer of the Los Angeles-based chain. “You have to take each day. We think we bought into the right fashion and we believe we should do well. We’re optimistic that the balance of the Christmas season will be OK.”
“It was very strong and we’re very happy with both Friday and Saturday,” said Bud Bergren, president and chief executive officer at Elder-Beerman, a chain of 68 midwestern department stores based in Dayton, Ohio. “November was where we planned it to be, which was a mid-single-digit drop due to the calendar shift, and we plan to pick up in December.”
A long-awaited drop in Midwestern temperatures spurred sales of coats and sweaters, Bergren noted. Jewelry, handbags and watches continued their year-long upward trend. Other solid performers were scarves, socks, sheets, bedding and throws.
“We’re positive going into the next 24 days,” emphasized Bergren, noting that Elder-Beerman planned for an undisclosed gain in December.
Better-priced goods checked faster than luxury wares, and Friday was far busier than Saturday at two shopping centers in Dallas, according to Henry S. Miller III, president of Henry S. Miller Interests. The company owns the luxury Highland Park Village center and is a partner in West Village, a year-old complex housing a variety of independent specialty stores plus such chains as Lucky Brand and Gap.
“We’ve noticed that retail sales were slow, and particularly higher price-point items were a little off,” Miller reported. “But Christian Dior, Banana Republic and the Gaps had spectacular days. Almost all [our retailers] expect the two weeks before Christmas to really pick up. They expect December 15 to be a much more significant day than after Thanksgiving.”
Miller said he’s observed that higher-end customers have been shopping less on the days after Thanksgiving, which he attributed partly to their leaving town or having company in their homes over the holiday.
“Most of the [after-Thanksgiving] shoppers are bargain hunters going to the mall or Wal-Mart and Target,” he reasoned.
…Nordstrom’s cashmere cable-stitch mufflers, $88 and… / … Isabella Fiore embroidered leather tote with antiqued brass hardware, $385… / …and from Barneys, an Armand Diradourian cashmere hangover pack, $90… / …and private label fur tote, $365. / A top holiday choice.