NEW YORK — The sales drought continued last week.
This story first appeared in the August 20, 2002 issue of WWD. Subscribe Today.
After a disappointing round of July sales, retailers are getting slammed again in August, when back-to-school selling usually kicks in.
Just how much b-t-s will help this year, though, remains to be seen.
J.C. Penney Co., which says it’s ahead of plan so far, was the standout among broadline retailers reporting weekly sales. Sears, Roebuck & Co., Federated Department Stores, and even discount superstars Wal-Mart Stores and Target all had lackluster sales last week, with Target, Sears and Federated below plan and Wal-Mart at the lower end of its expectations.
Despite the dour projections, retail issues were robust with the rest of the market on Monday. Standard & Poor’s retail index bounded up 8.13 points, or 2.8 percent, to 300.14. The S&P 500 picked up 21.93 points, or 2.4 percent, to 950.70 while the Dow Jones Industrial Average rallied 212.73 points, also 2.4 percent, to 8,990.79.
Seeing increases in their stock prices were Penney’s, up 65 cents, or 3.9 percent, to $17.38; Target, $1.26, or 3.6 percent, to $36.80; Sears, $1.36, or 2.9 percent, to $48.58, and Wal-Mart, 90 cents, or 1.7 percent, to $54.69. Federated fared worse as its shares dropped 9 cents, or 0.2 percent, to close at $37.04.
Wal-Mart showed a minor weakness last week, as comps were near the low end of its planned 4 to 6 percent rise for the month. Sales were slower at its Sam’s Club and Wal-Mart divisions. A spokeswoman on a call added, “Consumable products continued to drive sales. Back-to-school is off to a slow start as warm weather has affected apparel sales.”
On a recorded call, Sears said comparable-store sales for the two weeks ended Saturday were below its expectations for a high-single-digit decline. Merchandise categories in its full-line stores showing the greatest strength included juniors apparel and hardware. The retailer, however, maintained it was still on track for a low-to-mid-single comp decline for the year.
Comps for Target Corp.’s discount stores were trending below the firm’s planned increase of 2 to 4 percent last week. Women’s and men’s apparel were among the weakest performing merchandise categories. Total same-store sales for firm, which are expected to trail the flagship division for the month, are also below expectations.
Federated, on its Web site, noted, “Through the first two weeks of August, comp-store sales continue to be very disappointing and are running below our plan.” Last week, the firm lowered its comp expectations for fall to a 1 to 3 percent increase — down from the 3 to 3.5 percent uptick previously anticipated.
Penney’s bucked the trend with August department store comps, after three weeks, tracking modestly above its plan for a flat to slightly positive result. B-t-s categories were performing well with particular strength in children’s and fine jewelry as well as women’s and men’s apparel.
Although a majority of specialty retailers said it was too early in the season to see any meaningful trends in back-to-school, several companies reported there is increased competition and promotional activity, especially in denim. Last week, Gap noted it will be promotional in the category so as to not lose more market share. Gap and American Eagle Outfitters each indicated last week that sales have been below plan.
Still, there are opportunities for those retailers that focus on a targeted age group like Too Inc., or offer differentiated products like Urban Outfitters. Both those firms said last week that sales are trending strongly. Pacific Sunwear of California also said sales are tracking well, helped by its men’s business, a Pacbucks bounce-back coupon it did not have last year, as well as the movie “Blue Crush,” about women surfers.