Retailers just had a mood swing.

After a much-needed lift in sales last week, industry executives are now mildly optimistic about the outcome for holiday ’06 overall and for spring selling after feeling depressed through most of December.

On Tuesday, stores across the country reported a pickup after Christmas, bringing them on or near their five-week holiday selling plans that called for low- to midsingle-digit comp-store sales gains. The days between Christmas and New Year’s were sparked by gift card redemptions, meaty markdowns on winter products, some full-price selling of resort and early spring collections and luxury goods, continued demand for dresses, jewelry and handbags and a favorable calendar that provided two weekends of shopping right before each holiday. Neither returns nor markdowns were any worse than last year, executives added.

However, retailers are hung over from the prolonged weakness in coats, furs, boots and other cold-weather merchandise, which bombed due to the warm temperatures in most of the country and represent roughly a fifth of December inventories.

This month, white sales and price-cutting shift into high gear and peak around Martin Luther King Jr. Day on Jan. 15 and again around President’s Day on Feb. 19. By then, retailers expect to be cleansed of winter’s losers and stocked up with spring fashion. For mainstream retailing, January’s volume is 20 to 25 percent of December’s, though with the growing popularity of gift cards, some sales have shifted into January.

The first hard data on holiday sales emerge Thursday, when most major retailers report December same-store sales. Apparently, business started picking up the weekend before Christmas and was solid last weekend.

“We were counting on last week to achieve our December plan and business was terrific,” said Jane Elfers, chief executive officer of Lord & Taylor. “A lot of people came out to shop after Christmas. Dresses were awesome,” particularly little black dresses and short cocktail dresses from Nicole Miller, Laundry, Kay Unger and Tadashi. Shoes, jewelry and sportswear were also strong, Elfers added.

For coats and cold-weather merchandise, “it was the worst season in four years,” Elfers said. “A blast of cold air would be most welcome.”

This story first appeared in the January 3, 2007 issue of WWD. Subscribe Today.

Howard Socol, chairman, ceo and president of Barneys New York, said his luxury chain had “another great week,” posting comp-store growth in the midteens. “We sold markdowns and a great deal of resort goods. The big winners were designer apparel, jewelry and shoes.”

Ed Bucciarelli, president and ceo of Henri Bendel, said the company had its best December in five years. “We focused on our customer, we edited our assortments and we didn’t overpromote our merchandise,” he said.

Despite the warm weather, Bendel’s did well with cashmere knitwear and gloves, along with evening jewelry, clutch bags and wrap dresses. “There’s much less sale merchandise this year,” Bucciarelli said. “We ran inventories much leaner.”

At Bergdorf Goodman, “We were extremely pleased with the traffic between Christmas and New Year’s,” said Jim Gold, president and ceo. “Our clients were reacting strongly to both regular price and sale merchandise, and business was very balanced between our apparel and nonapparel categories. New York City unquestionably benefited from an influx of international tourists.”

And not just at the high end. “Herald Square continues to exceed our expectations. It’s being supported by the local economy, regional tourists and international tourists,” said Ron Klein, chairman and ceo of Macy’s East.

“It came down to the last day — Saturday — which was a very, very good day. The last three days of the month really made a difference and helped us get back to plan,” said Mark Shulman, president of Filene’s Basement. He said the Basement planned conservatively for December, did best with men’s dress furnishings and gifts, premium denim, and cashmere sweaters despite the warm weather, and that the calendar was a big factor in putting the chain on track for the month.

“Last week was good. Everything was pretty much on the plan,” said Ken Lakin, chairman and chief executive of Boscov’s, a Reading, Pa., department store chain. For the five-week period, “we were very close to making plan, and that is good to see, given the conditions we were facing. We’re up about 3 percent over last year, just under plan, and the main reason is that we had more aggressive plans in cashmere sweaters and some apparel areas that just didn’t materialize. We feel good and want to get on with the next season.”

Lakin said a few spring items were resonating with consumers, and he expected tops, denim and related men’s separates, particularly outdoor, country-inspired collections from Timberland, Woolrich and Columbia, would do well. He said by the end of January, Boscov’s would be 40 to 50 percent into spring and 100 percent by mid- to late February.

At the moment, Lakin and other retailers are upbeat about spring, based on some good early consumer reaction, low unemployment, Wall Street bonuses, increased consumer confidence reported by the government last month and speculation the housing market has bottomed out.

While executives are feeling a sense of relief, the performance in December was nothing to rave about. Wal-Mart on Saturday said that for the Nov. 25 to Dec. 29 five-week period, its comparable sales in the U.S. are estimated to be up 1.6 percent.

In his preliminary report on December sales, Todd Slater, managing director and specialty retail, apparel and footwear analyst at Lazard Capital Markets, forecast “an anemic” 1.9 percent comp gain for retailers, or 2.9 percent excluding Wal-Mart, versus 3.7 percent in December 2005, “with relative strength in warehouse clubs [up 4.4 percent] and department stores [up 2.7 percent].

He estimated specialty apparel chains, weaker at 0.7 percent, were hurt by the weather and lack of a strong fashion trend. Teen chains were seen up 1.2 percent versus 14 percent last year. “Strength at American Eagle Outfitters, up 8 percent, and Limited Brands, up 7 percent, was likely offset by weakness at Gap, at negative 5 percent.”

“I think we’ve experienced what the rest of the country has experienced — the sales growth has not been as strong as years previous, but we’ve still had sales growth,” said Annette Bethers, senior director of marketing for the Hollywood & Highland shopping center in Los Angeles. Bethers said tourism and sales drove last week’s business.

Jennifer Gordon, vice president of marketing at Caruso Affiliated, owner of The Grove shopping center in Los Angeles, seemed more enthusiastic about the season, noting some tenants posted double-digit gains. Coach, American Girl, Pottery Barn Kids and Victoria’s Secret were among those that met or exceeded plans.

Chana Taft, director of retail and real estate for True Religion, Los Angeles, said sales were strong this season, but not consistently. “People procrastinated,” she said.

Jeannie Lee, co-owner of Satine, an L.A. designer boutique, said the shopping rush was late, but intense. “This year, 10 days before Christmas, there was a flood of people like I’ve never seen.” The store was quiet on Dec. 26 and 27 before another rush materialized a few days before New Year’s Eve.

“Post-holiday was good because a lot of our customers redeemed gift cards,” said a spokesman for Sears Holdings, which operates Sears and Kmart stores. “Rather than put out new merchandise, we put out things they really wanted, things to augment gifts they already received, such as shirts to go with sweaters, CDs to go with CD players and video games to go with X Boxes. There are some sales still going on, but we’re all prepared for the spring merchandise.” Electronics, toys and apparel, especially Joe Boxer pajamas, were bestsellers.

J.C. Penney said markdowns were as planned and that over 65 percent of initial women’s spring apparel was set on the selling floors.

Charles Fieramosca, president of the Bailey Banks & Biddle jewelry chain, said sales were good last week and inventories were on plan. “We sold more gift cards than ever before, like most people did, and we had some redemption, but it seems like those customers don’t bolt in to redeem them the week after Christmas, so we expect a lot of that to still happen,” he said. “We run a post-Christmas sale every year, and we’re not doing any additional heavy promoting. It wasn’t the easiest fine jewelry year, but for those of us that run a proper business, we did OK.”

At Goody’s, Knoxville, Tenn., top-line sales were flat with 2005’s but exceeded plan, margins were higher and inventories were lower than in the previous year, according to Mary Kwan, president.

Kwan said sales floors would be clean after next week, and that spring deliveries would intensify next week. Strong holiday categories were basic, rather than fashion, denim, led by Gloria Vanderbilt and Goody’s private brand Duck Head. Sweaters, fleece, plus sizes and juniors, especially knit tops and dresses, performed well, along with jewelry, handbags and legwear.

Joann’s, a four-unit chain in Houston, wrapped up 2006 with brisk business in $100 to $300 evening tops for New Year’s Eve. “We stayed open until 6 p.m. New Year’s Eve because we had people shopping until the last minute for cocktail clothes,” said Steve Skoda, director of stores and buyer. “Inventory levels are pretty good, a little less than last year. We have new merchandise coming in — a lot of separates like Finley shirts, Zanella, Barry Bricken and Karen Kane — so the stores look really clean. I could deal with more new merchandise because I have space to put it in there.”

With contributions from Emili Vesilind, Sharon Edelson, Holly Haber and Georgia Lee

load comments
blog comments powered by Disqus