NEW YORK — Appearances can be deceptive. The malls may be busy and Fifth Avenue is packed, but there’s just not enough post-Christmas shopping to improve the generally glum revenue outlook for the season overall.
This story first appeared in the December 31, 2002 issue of WWD. Subscribe Today.
It became even sadder Monday when Federated Department Stores Inc., operator of Macy’s and Bloomingdale’s, among other chains, said comp-store sales for the November-December period would be down 4.5 percent, plus or minus a couple of tenths, lowering a previous projection by about 2 points.
Federated’s comp-store sales for the five-week December period alone, which runs through Jan. 4, are expected to be down 2.5 percent. Previously, the company said December would be flat to down 2.5 percent.
When Wal-Mart misses plan, you really know it’s rough out there. On Thursday, Wal-Mart also revised downward its December same-store sales projection to 2 to 3 percent, from 3 to 5 percent. And on Monday, the giant chain was more definitive about the season, announcing that its U.S. stores should fall in the 2 to 3 percent range, too, with the Wal-Mart division tracking up around 3 percent and Sam’s Club being negative. The chain’s strongest categories were home furnishings, electronics, toys, seasonal and health and beauty aides. The Northeast and Midwest regions were the strongest for the week. Both average ticket and traffic were positive for the week, with average ticket making up about 65 percent of the comp increase.
“It appears that even with us slightly missing our plan for the period, our holiday inventories are at manageable levels,” Wal-Mart said in an announcement Monday.
Target did see a pickup last week when sales beat the discounter’s expectations, but the company said sales for the month to date were “well below plan.”
J.C. Penney, among the most promotional of stores, has also been among the most successful at moving the goods out the door, which can be traced to more aggressive advertising, centralized merchandising and a greater focus on hot items. The chain said that for the five-week December period, same-store sales would be up 4.5 percent, with the best-performing categories being children’s, home, and women’s and men’s accessories, though the catalog has been way off, down 20 percent.
Generally, stores are indicating that inventories are under control, despite the disappointing business — and warnings last week from the National Retail Federation that the poor Christmas sales could mean ballooning inventories.
“We were a little bit tighter on our inventories,” said Ed Burstell, vice president and general manager of Henri Bendel. “The amount we have to move is considerably less [than in past years],” he said. “We came out much cleaner than anticipated.”
Burstell said by Jan. 15, he expects the store to be 50 to 75 percent transitioned into spring, and totally transitioned by the end of January.
“There is a post-Christmas rush,” said Raymond Gindi, chief operating officer for the four-unit Century 21 off-price chain. “We’re on plan,” he added, noting the traffic is strong enough to offset the huge markdowns, generally starting at 50 percent off.
At Barneys New York, which is never as blatant with markdowns as other stores, inventories seemed under control on Monday, with just a few racks on each floor with sales signs. Some departments such as Prada seemed thin on goods, indicating decent sales. The busiest area was Fred’s restaurant, which was filled. Executives weren’t available for comment.
In a report issued Monday, Merrill Lynch said, “We believe most broadline retailers missed their Christmas sales plans, and we expect sales and profit warnings over the coming weeks. Despite the aggressive promotional activity and the increased volume of sales generated from gift certificates following Christmas, it was not enough to save Christmas sales this year, and most broadline retailers did not show enough improvement in the fourth week of the December period (ended on Saturday, December 21 for most companies) to change their sluggish monthly sales trend.”
Merrill forecasted a flat broadline comp index in December versus retailers’ plans of a 1 to 2 percent increase and a 0.4 percent increase last December.
“I’ve seen a lot of bodies out there. People are out and about,” said Stephanie Greenfield, co-owner of the Scoop specialty chain, though she did say that many of her regular customers this week are on vacation. Her post-holiday business has been “completely steady,” however.
For all her stores, which are in Manhattan, Miami, and East Hampton, business has been on plan — about 10 percent ahead for the year, because of last year’s post-9/11 downturn and “staying focused on what drives our business and keeping our inventories lean.”
“Business continued to beat plan after Christmas and was ahead by double digits,” said Conrad Szymanski, president of Bealls, a 66-unit moderate department store chain based in Bradenton, Fla. “We saw a lot of gift cards come right back into the store the day after Christmas and women were looking for lightweight seasonal casualwear. It’s been a seasonally mild winter in Florida. Our inventories are very clean, though, and there’s not a lot of markdown merchandise. In fact, I’m actually kind of worried that our inventories might be too clean come January.”
Taubman Centers’ director of communications Karen MacDonald said business was strong at its malls; Friday, Saturday and Sunday, returns were light, and 22 of 26 centers had double-digit increases on gift certificates for the season, at an average of 25 percent.
Elder-Beerman Stores Corp., a 68-unit moderate chain in Dayton, Ohio, said after-Christmas sales performed well against plan and last year for Thursday and Friday. Sales dropped off fairly quickly starting Saturday, according to Gloria Siegler, manager of investor relations and corporate communications.
Spicy Couture, a women’s contemporary store in Dallas, said sales were flat last week, as they’ve been most of the month. “Women are very cautious and will spend, but not on novelty items. Throughout the holidays they’ve come in wanting fashionable but practical styles such as denim, T-shirts and long knit sweaters,” said Milan Payne, who co-owns Spicy Couture with her husband Ken Payne. They said their Spicy II store, near Southern Methodist University, is on plan.