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Specialty Store Sales Rise in June

On a year-over-year basis, specialty store sales were 4.8 percent higher than in June 2012, while sales at department stores slipped 5.1 percent.

WASHINGTON — Consumers appeared to be in the mood for buying apparel and accessories in June, boosting sales in the specialty store category last month, but they pulled back from purchases at department stores, according to the monthly retail sales report released by the Commerce Department on Monday.

This story first appeared in the July 16, 2013 issue of WWD.  Subscribe Today.

Sales at apparel and accessories stores rose a seasonally adjusted 0.7 percent last month to $21 billion, while sales at department stores fell 1 percent to $14.5 billion. General merchandise stores, a category that includes discounters and department stores, saw sales edge up 0.1 percent to $55 billion in June.

On a year-over-year basis, specialty store sales were 4.8 percent higher than in June 2012, while sales at general merchandise stores were up 1.1 percent. Sales at department stores slipped 5.1 percent compared with a year earlier.

“This particular report is a little disappointing and below economists’ expectations,” said Bill Lynch, vice president and director of investments at Hinsdale Associates. “When the consumer credit report came out in May, it actually showed a fairly large increase, and it seemed liked it signaled an upturn in consumer spending.”

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Lynch said rising gasoline prices might have played a role in the dip in department store numbers.

Within the department store category, Macy’s has been the “star,” while Kohl’s has been “doing OK,” Lynch said. He added that the “struggling” J.C. Penney is still trying to turn around its business.

“I think consumers are still in the mind-set they want a bargain,” Lynch said. “They want quality merchandise, and they don’t want to pay as much for it. Certainly stores like Target fit that description as well as Costco and Wal-Mart.”

In the overall economy, retail sales rose 0.4 percent to $422.8 billion, driven primarily by auto and gas sales.

“Looking ahead, we expect real consumer spending to increase at a 1.9 percent rate for 2013, and then pick up at a faster rate in 2014,” Christopher said. “The back-to-school season is about to start heating up, and these recent numbers do not bode well for many retailers,” said Chris J. Christopher Jr., director of consumer economics at IHS Global Insight.