Most Recent Articles In Retail/Business
Latest Retail/Business Articles
- CEW Panel Features Indies Ripe for Acquisition
- Peter Millar Partnering With Andrisen Morton on Denver Store
- Father’s Day Surge Buoys Retailers’ Spirits
More Articles By
Mother Nature pulled the plug on Christmas business Monday, hurling a blizzard up the East Coast that dumped almost two feet of snow on New York, Boston and other cities.
While business wasn’t bad through much of Sunday, it quickly tapered off by late afternoon as the snowfall and winds intensified and buried any hopes of a strong start to post-holiday sales. Many retailers and malls were forced to close early Sunday and delay openings on Monday or remain closed, particularly in Manhattan and outlying areas. Massive transportation issues Monday snagged retail operations and deterred mall traffic as roads were being cleared throughout the day, major airports remained shut until early evening and train and bus lines scrambled to revive services.
The storm hit just when retailers were anticipating a resumption of the spirited shopping they’d enjoyed the week of Black Friday and again during the week of Christmas. The day after Christmas is always a big volume day, among the top six of the year. It’s fueled by gift card redemptions, returns and exchanges, and retailers unleashing a barrage of after-Christmas sales.The industry consensus Monday was that the storm was a significant factor in depressing sales but didn’t represent a disaster since the holiday period had been so strong until then. Retailers and analysts believe most of the volume lost Sunday and Monday can be made up in the next few weeks, although it will require stores to extend sales and advertise more to clear merchandise, impacting their costs.
At Saks Inc., “We closed stores early yesterday and today we are planning on delayed openings for New York and Walt Whitman,” Julia Bentley, senior vice president of investor relations and communications, said Monday. “Late openings means noon, but it will really depend upon staff ability to get to the store and the conditions. Short Hills and Bergen [in New Jersey] closed early yesterday and all day today. Three New York-area Off 5th [outlets] closed early yesterday and all day today.”
On the positive side, “There are lots of tourists in the city due to weather, who are continuing to shop,” Bentley noted.
At Scoop, “We had a great Christmas, including a massive surge last week, then the storm came and we closed eight stores in the Northeast,” said chief executive officer Susan Davidson, who was supposed to travel from Chicago to New York and then to Puerto Rico, where she has a home, but she bypassed New York and went straight south. “We will open some stores on New Year’s Day to make up for today. We’ve never done that before. I’m not sure, but I think we can make up the business. It’s been so good, I don’t want to give any of it back.”
“The storm totally puts a dent into things. When you lose one of the top six days of the year you feel it,” said Marshal Cohen, chief industry analyst for The NPD Group. “The loss of post-Christmas weekend is brutal. This weekend was shortened already,” with Saturday being Christmas.
Cohen said the storm swept through roughly 25 percent of the nation’s retailing, moving from the Midwest to the East Coast, and altered the shopping mood. “The urgency issue isn’t quite there anymore,” he said. “Holiday was on steroids and all of sudden lost some of that luster. However, the storm doesn’t really affect the overall scheme. It affects the image of what the holiday brought, and we could go from being a very good December to an OK December.”
Analysts said retailers would lose 0.5 percent to 1.5 percent of their holiday sales as a consequence of the storm, though most of it should be recouped later this week and into January. They’ll be helped by online retailing, which would likely pick up more than originally expected with consumers stranded at home. In addition, tourists trapped in New York and other major cities due to cancelled or delayed flights showed up in the stores Monday, particularly the big anchor destinations such as Saks, Barneys New York and Macy’s Herald Square.
A steady stream of tourists and shoppers made their way down Fifth Avenue Monday, occasionally ducking into stores to make post-Christmas purchases and seek refuge from the slippery, messy streets. Saks enticed consumers with 40-percent-off sales on select accessories, shoes and women’s designer apparel. While sale signs in the men’s department offered up to 50 percent off, most shoppers flocked to women’s apparel, where they rifled through sales racks. At Bergdorf Goodman, customers made a beeline to the designer shoe department, where already marked down footwear was 50 percent off. But even with a 33-percent-off sale on select merchandise, traffic in other departments was noticeably lighter. A bustling Bloomingdale’s lured shoppers with apparel marked down 40 to 50 percent. “It’s been very active since we opened,” said a store associate.
However, at all those stores, while traffic was strong, customers didn’t appear to be carrying many shopping bags.
Intermix stores in Manhattan opened their doors on Monday morning, but closed early because of the weather conditions and the resulting decrease in foot traffic. They are set to reopen today at regular hours.
Traffic was brisk Monday afternoon at Barneys and at the Ugg Australia flagship on Madison Avenue and 58th Street. Ugg had the usual line of shoppers outside its entrance waiting to get in Monday morning, several seeking Ugg’s signature sheepskin boots to keep their feet warm in the snow.
Outside of Manhattan, Macy’s said 70 stores closed early from the Carolinas to New England, most between 6 and 7 p.m. Sunday, as opposed to 9 or 10 p.m. closings this time of year. Fifty Macy’s units opened between 90 minutes and two hours late Monday, from the scheduled 10 a.m. opening.
A Target spokeswoman said the retailer closed 29 stores in Virginia, Maryland, New Jersey, Pennsylvania, Massachusetts, Delaware, New York and Connecticut Sunday, all of which were reopened by 11 a.m. Monday.
At J.C. Penney, “We have roughly a dozen stores in the Northeast closed today due to extreme weather conditions,” said a spokesman Monday. “Approximately 80 stores closed early Sunday. The unsafe weather conditions in the Northeast appear to be moving on, and we anticipate our stores to be fully operational as soon as safe access is restored. Also, while each of our 1,100 stores is important to our business, we expect minimal impact to our business on a total level.”
At Taubman Centers, four centers closed early Sunday: MacArthur Center in Norfolk, Va., closed at 3 p.m. instead of the normal 8 p.m.; West Farms in Farmington, Conn., closed at 7 p.m. instead of 9 p.m.; The Pier Shops at Caesar’s in Atlantic City closed at 4 p.m., instead of 6 p.m., and the Mall at Short Hills, Short Hills, N.J., closed at 6 p.m. instead of 9 p.m., and remained closed Monday but was expected to open on time Tuesday. The Pier, West Farms and Stamford Town Center opened at noon Monday.
“On the East Coast, traffic is definitely soft today but we expect to regain momentum by the end of the week when the weather subsides,” Karen MacDonald, director of communications for Taubman Centers Inc., told WWD on Monday.
Simon Property Group Inc. reported that eight shopping centers had delayed openings Monday, while 17 closed early on Sunday. Simon’s Roosevelt Field mall reported “several” stores never opened Monday and advised shoppers to call ahead to see if the store they wanted to shop was open.
In Boston, staffers at Coach, David Yurman and Sephora were busy finessing displays by 9 a.m. Monday — an hour before doors were scheduled to open. On Newbury Street, Niketown’s sidewalk was shoveled clean more than an hour before its opening. As municipal snowplows tried to clear the streets, two parking lot attendants used snowblowers to dig through the snow on what was uncharacteristically a deserted street. Meanwhile, shovelers did what they could in front of Ecco and other boutiques.
The storm didn’t hit only post-holiday shopping, though — it also hurt retail shares on Monday. Retail issues ended the day with a 0.3 percent skid amid concerns about business lost to the storm. The S&P Retail Index ended the day at 510.48, down 1.35 points, about half the size of its largest decline of the day. The major U.S. indices finished with smaller percentage declines, with the Dow Jones Industrial Average off 18.46 points, or 0.2 percent, at 11,555.03. The S&P 500 and Nasdaq Composite Index were both off 0.1 percent at 1,257.54 and 2,667.27, respectively. Trading volume was light.
According to Amy Noblin, analyst for Weeden & Co., “The week after Christmas can account up to 15 percent of holiday sales. I think that Sunday was expected to be even more important for retailers with people having to go back to work on Monday. The weather will cause the holiday season to close on a softer note.”
Nonetheless, her holiday forecast of positive low-single digits remains unchanged, as sales were driven largely by pre-Christmas shopping.
Liz Pierce, analyst for Roth Capital Partners, said holiday has been stronger than had “originally been expected, driven by pent-up demand and frugality fatigue. However, yesterday’s severe weather that blanketed much of the East Coast is likely keeping a lot of consumers at home and may curtail some of the comp upside we had anticipated. That said, online sales could be a beneficiary of the weather and even though most companies do not include online sales in their comp sales, the additional sales, which tend to have higher margins, could help cushion some of the lost sales at retail. Nonetheless, our forward outlook on the sector is tempered by upcoming difficult compares and lingering high unemployment and therefore, we expect consumer and retail stocks will see some selling pressure in the near term.”