NEW YORK — Now all the hopes of retailers lie in the cards.
After what is being labeled the worst holiday shopping season in three decades, some retail analysts firmly believe that post-Christmas sales will be better than pre-Christmas ones. And the rush of consumers might just be enough to make up for the dismal numbers seen at retail throughout November and December.
According to a report by Todd Slater, equity analyst at Lazard Frères, sales "have been trending that way for years, a phenomenon we like to call the ‘January effect.’ Consumers have increasingly spent more of their time shopping the stores the week and month following Christmas, where one’s money can stretch 25 percent, 40 percent or even 50 percent further."
Slater pointed out that the January effect is magnified during weak economic periods, when consumers penny-pinch because it is a "necessity." The analyst added that post-Christmas sales this year could be additionally boosted by the "gift card effect," "driven by the redemption of ever-popular gift cards and gift certificates in lieu of sweaters and CD players." According to Slater, the purchase of gift cards was likely accelerated in the days preceding Christmas, as gift cards became the choice for those who procrastinated in making their purchases.
Slater wrote that retailers said "gift card sales were up by as much as 50 percent over 2001, a year that in itself set a record."
American Express estimates that the cash, check and gift certificate market is worth about $70 billion a year. A survey in November by America’s Research Group, cited in a Salomon Smith Barney report, indicated that 51 percent of those polled were likely to give gift certificates, gift cards or cash this year, up from 39 percent a year ago.
Data from the International Council of Shopping Centers indicates that the average amount in gift certificate and card sales per mall during the 2001 holiday season was $598,643, with the most frequently sold denomination for the certificate/card at $25 and the average amount of a purchase using a certificate/card at $59.
Retailers book revenue from gift cards when they are redeemed, which would help post-Christmas sales when recipients head to the stores to make their purchases. "[About] 10 percent of the gift cards are redeemed in the week following Christmas, with another 40 percent to 50 percent coming in the month of January," according to Slater.Linda Kristiansen, analyst at UBS Warburg, wrote in a research report on The May Department Stores Co. on Dec. 26 that 15 percent of the month’s sales were still forthcoming. "With pre-Christmas gift card business reportedly tracking at twice the rate of store sales, we suspect that modest upside to month-to-date sales results is most likely," she noted.
Deborah Weinswig, retail analyst at Salomon Smith Barney, wrote in a Dec. 16 research note that some department store retailers and discounters this year pushed the gift card as an option for holiday presents.
Lord & Taylor, part of The May Department Stores Co., marketed gift cards as the "new gift of choice," and offered a variety of holiday designs. Bloomingdale’s, part of Federated Department Stores, has been promoting gift cards with in-store signage sponsoring a "one gift fits all" focus.
At Kohl’s, Weinswig noted, family members were buying its gift cards for younger customers. She pointed out that if a customer returns merchandise from Kohl’s without a receipt, the consumer would receive a gift card instead of cash. At J.C. Penney Co., a gift card doesn’t have an expiration date, but the retailer assesses fees two years after a card has been left unused.
"We believe that gift card growth in 2002 has been particularly strong due to the shorter holiday selling season and the lack of a ‘must-have’ gift item," she wrote. The analyst noted that retailers were likely merchandising stores in anticipation of strong post-Christmas sales, which will partly be driven by gift card redemptions.
To be sure, the gift card focus isn’t necessarily an ideal way for retailers to get more foot traffic into the stores to clear out excess merchandise. Frères’ Slater noted that 15 percent of gift certificates are either lost or unused, representing lost dollars that most likely will never accrue to the retailer’s sales or bottom line.
Weinswig pointed out that most state laws require that unused dollars from a gift card, after a certain period of time, usually are sent to the state, as those dollars represent "unclaimed property." The states in turn hold the money on behalf of recipients, who can technically reclaim it from their respective state governments. Retailers, however, receive interest on the unredeemed portion of the gift cards.But, as reported, retailers are looking for any silver lining they can find — even if it’s the lingering hope of consumers redeeming gift cards over the coming months. However the cards fall, though, analysts are bracing themselves for a series of revised retail projections in the next few weeks, following Thursday’s revision downward by the world’s largest company, Wal-Mart. As Tracy Mullin, chief executive officer of the National Retail Federation, said Thursday: "Retailers will be counting on postholiday sales more than usual to pad their holiday numbers. As much as 10 percent of holiday sales can be recorded the week after Christmas."
In yet another fashion show shuffle, @elleryland is moving its show in sync with the Paris couture calendar — though the brand is still keeping one foot on the city’s ready-to-wear schedule. Their runway show in January will coincide with the launch of a new strategy: designing two main collections each year instead of four, which will then be released in four drops. “As we all know, the system needs to change. We need to show sooner to give time back to artisans and designers to do what they do best — create,” said founder Kym Ellery. #wwdnews #wwdfashion (📷: @kukukuba)
@maxmara’s classic 101801 coat was the cornerstone of its pre-fall 2018 collection. The design team expanded the traditional double-breasted, kimono-sleeved style into a trapeze coat, lean belted styles and a peacoat and presented them in monochromatic looks – like the camel one pictured here. #wwdfashion #prefall18 (📷: George Chinsee)
The @cfda has shifted the dates of #NYFW, with Men’s showing on February 5 through February 7, and Women’s will directly follow, running from February 8 through 14. The preliminary schedule will be released on the CFDA’s web site in the next few days, but Mark Beckham, VP of marketing for the CFDA, revealed that @rafsimons will be back to close the men’s-specific part of the week with a show on February 7 #wwdfashion (📷: Kelly Taub)
@ferragamo is introducing a new space dedicated to the development of women’s and men’s leather good samples. The laboratory, which is created eco-friendly materials and designed to reduce the environmental impact of the manufacturing processes, will allow the company to expand its accessories offering through traditional artisanal approaches. #wwdfashion (📷: @aitorrosasphoto)
How does a “regular, degular, schmegular” girl from the Bronx, N.Y., become a Grammy-nominated artist with a certified platinum record in less than a year? Call it the @iamcardib come up. The 25-year-old has become a musical sensation, and the fashion world is taking note. “If I could describe her style I would say drama. She’s really into the dramatics,” says Cardi B’s stylist @kollincarter. See how Carter styles her bold and out there looks with the link in bio. #wwdfashion
“There is no formula. There is no guideline. I can watch Ted Talks all day, but there is no one who can advise me on exactly what it is I should be doing,” said @ronniefieg, CEO of @kith, in an interview with WWD’s @ariahughes at the brand’s new SoHo office in Manhattan. Head to WWD.com to see how Fieg went from hanging out in shoe stockrooms at 13 to building his own business. #wwdfashion (📷: @weston.wells)
@fearofgod and @maxfieldla have teamed up on a pop-up installation. The store, located in the gallery space across from Maxfield’s Melrose Ave location, is the site of the brand’s House of God pop-up in which Fear of God founder @jerrylorenzo has created a church-inspired installation. A dozen vintage church pews sit in front of an LED screen playing 90s gospel singers in an effort to re-create an environment akin to a Southern Baptist Church, Lorenzo explained. Read more about the pop-up on WWD.com #wwdfashion (📷: Jennifer Johnson)
Known for his sleek, sophisticated American glamour, Norman Norell is the subject of an upcoming exhibition at @fitnyc. “Norell: Dean of American Fashion,” which runs from February 9 through April 14, will feature approximately 100 ensembles and accessories. His best work is exemplified by the designer’s glittering “mermaid” gowns frosted with thousands of hand-sewn sequins – like the one pictured. (📷: William Helburn) #wwdfashion
For pre-fall 2018, @balmain didn’t let go of the glitz. A crystal embroidered baseball jacket priced at around $40,000 hangs in the “couture” section of the brand’s first men’s pre-collection. Sporting the words “Balmain Army” across the back, the item took around two months to make. “When it was completed, it was like Christmas, it was like, ‘It’s done, it’s exactly what I wanted,’” said Balmain’s creative director @olivier_rousteing during a tour of the collection in a Paris showroom on Monday. #wwdfashion