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NEW YORK — It could have been much worse.
This story first appeared in the December 10, 2002 issue of WWD. Subscribe Today.
Escaping the big lull in shopping that usually hits the week after Thanksgiving, and lasts until about 10 days before Christmas, retailers on Monday reported better-than-expected business last week, even with Thursday’s snowstorm. By the weekend, traffic returned, bringing retailers back on, or slightly ahead of, their plans for small gains on the week.
What drove shoppers back to the stores were sub-freezing temperatures, lots of reduced prices on brand name and designer goods, often 40 percent or more, and a sense of urgency. With six fewer days of shopping between Thanksgiving and Christmas compared with 2001, consumers are doing some serious shopping, particularly for sweaters, boots, hats, scarves, gloves and coats.
Still, retailers remain uncertain about the rest of December, and in New York, merchants are fretting over the possibility of a transit strike next week (see story on page 13). They say a strike would kill business during the walkout period, and much of it wouldn’t be made up, considering the compressed shopping season.
On Monday, Wal-Mart Stores, which has become a national barometer for tracking the retail business, said it was trending toward the low end of its comp-store sales plan for a 3 to 5 percent increase for December. Wal-Mart did best last week in men’s and boys’ apparel, accessories and outerwear. The Northeast and Midwest were the strongest regions, and while traffic due to snow and ice was reduced, the average ticket was higher, accounting for the majority of the week’s comp increase.
J.C. Penney also said it had a low-single-digit sales uptick last week, and tracked ahead of its December plan, which is slightly more conservative than Wal-Mart’s. Penney’s said all merchandise divisions produced “solid sales increases” versus a year ago with fine jewelry, shoes
and children’s leading the way.
Federated Department Stores Inc. projected this month would be about even with a year ago. “Given the snow midweek in the eastern part of the country, sales in the first week of December were difficult and hard to judge,” Federated said. The company projects comps for the November-December period to finish at the low end of its plan of down 2.5 percent to flat. ShopKo Stores Inc. said sales last week tracked below its comp-store sales plan for a flat December.
Locally, the picture was brighter. Manhattan was packed with shoppers last weekend, making up for some lost business due to the snowstorm, though several retailers said that when people left work early Thursday, many stopped at stores instead of going directly home. Business at malls was more severely impacted.
“We had a good week, despite the terrible storm on Thursday,” said Bloomingdale’s chairman and chief executive Michael Gould. Echoing every retailer’s theme song, he said that for the remainder of the season Bloomingdale’s would remain cautious but upbeat.
At Bergdorf Goodman, “We had a great week, even with the storm. We’re pinching ourselves,” said Ron Frasch, chairman and ceo. Asked if he could project for the rest of the month, he replied: “We just don’t know what to expect. We need to get as much in our pocket ahead of the game.” He said Bergdorf’s had one of its best weeks ever last week, when a 40 percent off designer sale broke, though he said his store broke designer prices later than much of the competition. Even with the sale, “full-price selling on new receipts for pre-spring and resort was outstanding,” Frasch said. “People are responding to a shorter window of time to buy for Christmas.”
Top sellers have been Dolce & Gabbana, Marni, Eskandar, and resortwear from Yves Saint Laurent, Roberto Cavalli and Chanel.
“Shawls, scarves and fur were just explosive,” Frasch added.
At Tourneau, the 22-unit watch retailer, “business since Thanksgiving has been extremely strong and we just closed another good weekend,” said Andrew Block, senior vice president of marketing. “All stores are ahead of plan and the company is ahead of plan. It’s very encouraging. People started shopping right out of the box,” even for Tourneau’s watches in the middle price point, on average from $1,500 to $3,000, which had been struggling but now are seeing good sell-through.
Barneys New York chairman, ceo and president Howard Socol said, “We are happy with the first week’s results,” of December. “If they continue like this, we’ll be in fine shape.” Barneys broke prices on designer last Wednesday and Thursday, but he said other categories that were regular priced, such as men’s and women’s accessories and shoes, did well, too. Saturday and Sunday were “solid days,” he said, adding, “Going into December, we thought we were at risk of a few points, but now, unless there is a transit strike, we feel we will make our December plan.”
Downtown, however, business has been tough. William Barthman Jewelers, the two-store jeweler which has its flagship near the former World Trade Center, has not been getting foot traffic, said Joel Kopel, the store’s manager. “Even though people have moved back downtown, it’s been very quiet. I think we were busier last year, after 9/11.” This past weekend, Barthman stayed open on Sunday, which it will continue to do through the season. Some standout brands have been Rolex and David Yurman, Kopel said.
Last week, temperatures more than 20 degrees colder than the same week last year across eastern North America got consumers thinking more about winter weather goods, according to Planalytics, a firm which helps retailers plan their businesses based on weather forecasts. Planalytics noted that Thursday was the first major winter storm over the Southeast and Eastern portions of the U.S., wiping out one business day, but by Saturday, drier weather — and consumers — returned. Western North America continued to experience warmer and drier conditions than last year, suppressing demand for winter goods.
At the luxury Highland Park Village shopping center in Dallas, business last week was ahead of last year and stronger than the weekend after Thanksgiving. Some retailers reported gains of 35 to 120 percent. “People are really starting to shop more,” said Elizabeth Haney, marketing director for Henry S. Miller Interests, which owns the center. “All the stores said they saw a lot more traffic than last weekend and had a great Saturday. They are not jumping for joy like this is the best ever, but they are pleased.”
Sales exceeded plan at the Stanley Korshak luxury store in Dallas, where women’s apparel and jewelry are faring especially well. “This is a huge month for us in jewelry, and we have a trunk show coming up this weekend with Loree Rodkin that is usually gargantuan,” said Crawford Brock, owner. “We’re feeling pretty good about where we are.”
Some West Coast retailers said they are in better shape this holiday season than last year. Oren Hayun, principal of Planet Funk, a chain of nine young contemporary stores in Southern California, said traffic was “brisk and better than expected” at his mall-based stores over the weekend. Chunky sweaters, low-waisted denim, jackets with faux-fur lining as well as newspaper boy hats and oversized, long scarves, did well. Velour and terry track suits have continued to sell.
Women’s designer boutique On Beverly Boulevard in Los Angeles is up 40 percent this holiday season, said owner Shauna Stein. She said her customer has requested dressy separates such as godet skirts with novelty details like crochet and lace. “Velvet is also doing exceptionally well this year,” she added, noting off-the-shoulder, three-quarter-sleeved velvet tops are one of her standouts. Knit tops with asymmetric necklines have been successful, too. Jackets, whether utilitarian with zippers and epaulet sleeves or the bomber variety, have also been strong. “They make tailored pants or jeans look like a million bucks,” she said.