NEW YORK — Uncommon weakness at its discount stores kept Target Corp.’s sales gains last week below their projected level for the month.
Minneapolis-based Target said that, for the month, the Target division expects a comp rise of 3 to 5 percent. Due to slower growth rates and the smaller size of the firm’s Marshall Field’s and Mervyn’s divisions, total corporate comps for the month should sag the firm’s bread-and-butter division by 1 to 1.5 percent.
Strongest merchandise categories for the week included pharmacy, entertainment, domestic and toys. Garden, electronics and jewelry were among the weaker categories. Regionally, the Mid-Atlantic and Northeast regions continued to outperform the rest of the country.
Like those of other retailers, shares of Target took a beating Tuesday, falling $1.82, or 5 percent, to end the day at $34.62.
Target’s same-store sales last month came in ahead of plan with a 4.9 percent increase, thanks to a 6.1 percent uptick at its discount stores. Declines at Marshall Field’s and Mervyn’s totaled 2 and 0.1 percent, respectively.
While trending below its own projections for at least the start of the month, Target still has loftier goals than many retailers. However, Wal-Mart Stores, an exception to many retail rules, said strong growth in women’s and girls’ apparel helped same-store sales last week trend toward its July forecast of a 5 to 7 percent advance. Recently, the discount giant raised second-quarter earnings estimates by a single cent, to 44 to 45 cents a share.
While discounters have in the recent past been held to a higher sales standard, other key broadline retailers with lower same-store sales projections met their plans for last week.
Federated Department Stores, which finished June with a 0.4 percent same-store decline, said Monday that it expects its July same-store sales will be flat to down slightly from year-ago results. J.C. Penney Co. said comps were tracking on plan for a department store comp decline of 2 to 4 percent for the month as a whole. Sears, Roebuck & Co. said sales through the first week of July were in line with its plan for a low-single-digit same-store decline for the month.Broadline retailers showing declines in their stock prices Tuesday included: Wal-Mart, down $3.56, or 6.7 percent, to $49.88; Sears, $2.25, or 4.8 percent, to $44.75; Penney’s, 64 cents, or 3.5 percent, to $17.42; Kohl’s, $2.21, or 3.3 percent, to $65.24; May Co., 95 cents, or 3.2 percent, to $29.23; Federated, 59 cents, or 1.6 percent, to $35.46.
Specialty retailers also getting a sinking feeling about their shares were: Pacific Sunwear, down $1.57, or 7.2 percent, to $20.40; Gap, 94 cents, or 6.9 percent, to $12.78; Christopher & Banks, $2.39, or 6.5 percent, to $34.51; Chico’s FAS, $2.11, or 6.3 percent, to $31.39; Bebe, $1.03, or 5.5 percent, to $17.65, and The Limited, 89 cents, or 4.9 percent, to $17.45.
While the sluggish economy has favored value over style, Target and Wal-Mart also face less competition frombankrupt Kmart, which last year was pushing to become more of a player on the low-price scene.
A recent A.G. Edwards survey compared the average-item prices at Wal-Mart, Target and Kmart stores in the St. Louis area, within a 10-minute drive of each other, and found the latter is much less competitive this year, as Target continues to breathe down Wal-Mart’s neck.
While similar surveys conducted between January 2000 and June 2001 by the investment firm found Kmart’s prices to be 8 to 15 percent higher than Wal-Mart’s, the study showed Kmart’s retail prices are now an average of 19 percent above Wal-Mart’s. Likewise, while Kmart had been within 5 to 8 percent of Target, the difference between prices at the two retailers has grown to 15 percent. In the latest survey, Kmart proved to be the least competitively priced in convenience foods, where its prices on average were 36 percent higher than Wal-Mart’s and 27 percent above Target’s.
Analyst Robert Buchanan noted that the survey "showed Target to remain competitively priced with Wal-Mart — especially so when one adjusts for higher incomes [and the] generally lesser degree of pricing sensitivity of Target’s customers." On average, Target’s prices on the 198 items across seven merchandise categories covered in the survey were 4 percent higher than Wal-Mart’s."
@tradesy is turning the concept of a showroom upside down with its new space in Santa Monica. Here, the company plans to hold events, art exhibits and a showcase rare fashion pieces like this Louis Vuitton boxing set. Get all the details on Tradesy’s first showroom on WWD.com. #wwdnews
Spotted last night at the @erdem x @hm launch event: Kate Bosworth, Rashida Jones, Kirsten Dunst and Selma Blair. The party, which took place in LA, also marked the opening of their pop-up shop. “I was interested in creating a collection that wasn’t in any way disposable. It was about pieces you’d create and keep forever, things that have a permanence to it,” designer Erdem Moralioglu said. #wwdeye (📷: Katie Jones)
Renee Zellweger in yellow in 2001 and again in 2017. Chosen as one of the 12 @pantone Leading Spring Colors (and dubbed “Meadowlark”), it only makes sense that the bright hue stands the test of time and is making a resurgence this season, seen already on stars like @blakelively and @gigihadid. (📷: Donato Sardello & @rexfeatures) #wwdfashion #tbt
Dior’s 70th anniversary celebration continues with a new exhibition at the Royal Ontario Museum in Toronto. “Christian Dior,” which is scheduled to run through March 18, takes a look at the founders tenure from 1947 to 1057 and feature 40 designs. Pictured here is an evening gown from the Ailée, fall 1948-49 haute couture collection. #wwdfashion (📷: Brian Boyle)
As one of the most recognizable models in the world, Christy Turlington Burns has an insider’s view of the fashion industry and the allegations of sexual harassment swirling around it. “I can say that harassment and mistreatment have always been widely known and tolerated in the industry. The industry is surrounded by predators who thrive on the constant rejection and loneliness so many of us have experiences at some point in our careers,” Turlington told WWD, along with her suggestions for how the modeling world should protect younger women and men. Read more on WWD.com. Link in bio. (📷: Tony Palmieri) #wwdnews
@asics America has tapped a new brand ambassador: famed DJ/record producer @steveaoki. This initiative is intended to set the tone for the new brand identity and philosophy and will include partnerships with influencers and in-store and off-line activations that will continue into next year. This is Asics’ most significant marketing effort in two decades, and is expected to attract younger consumers to the brand. #wwdfashion
24-year-old Jean Prounis is redefining the rules of jewelry. Formerly a studio assistant to Jemima Kirke and a design apprentice at Ghuran, she focuses on handcrafted subtleties and ancient goldsmithing techniques. “There was a really sterile feel in the environment and I wanted to have jewelry with character that shapes how you wear it everyday,” Prounis said. Each piece is hand made in New York, either by Prounis or three other jewelers in the district. #wwdfashion
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews