NOVEMBER SALES POOR OVERALL, DESPITE STRONG THANKSGIVING
Byline: Melanie Kletter / With contributions from Thomas Cunningham
NEW YORK — Even with a rush of business after Thanksgiving, November sales overall were disappointing for many retailers, raising concerns about the holiday season and pushing down retail stocks.
Among the largest losers on the Big Board Thursday, when November sales were posted, were Ann Taylor, down 2 to 42; J.C. Penney, 1 1/2 to 20 15/16; Saks Inc., 1 1/16 to 17 5/16, and TJX Cos., 3 1/4 to 20 5/8. However, many analysts and store executives said traffic would pick up with the colder weather and as holiday promotions intensify, and that last month’s slump was largely due to unseasonably warm weather inhibiting apparel sales.
There were a handful of specialty and discount chains that managed to pull out significant gains, including American Eagle, Talbots, Wal-Mart, Neiman Marcus, Target, Ann Taylor, Kohl’s and Bradlees, which all registered same-store sales gains in mid-to-high single digits.
Double-digit gains were seen at American Eagle Outfitters, Chico’s F.A.S., Charming Shoppes and Brauns. Sears, Roebuck, a laggard all year, was also a surprise winner in November, posting a 5.9 percent comp jump.
However, many chains missed their November plans, indicating that the Thanksgiving weekend boost just wasn’t enough to overcome poor sales in the first three weeks of the month. Weakness was often cited in sweaters, outerwear and cold-weather accessories, though home goods, gifts and accessories and consumables continued to sell briskly. Retailers have planned well by keeping inventories lean, and there has not been more than the expected level of promotional activity so far.
“Most retailers’ inventories are in pretty good shape,” commented Steve Kernkraut, analyst at Bear Stearns. “Many have learned their lesson that customers are shopping late, and they are trying to be as full-priced as they can.”
Same-store sales on average rose 4.2 percent in November, according to the Deutsche Banc Alex.Brown index of 100 stores. This was the second-lowest gain all year, according to the index. In April, same-store sales were up 4.1 percent. In November, hard-lines stores were up 6.6 percent, far outperforming soft-lines retailers, which were down 0.5 percent.
A more cautious John Pitt, director of LJR Redbook, said sales had been depressed since September, making it tough to predict a significant pickup later. “We have seen softer trends in the second half of the year, and we have seen poor demand for core merchandise in apparel and department stores,” Pitt noted.
Neiman Marcus Group said its comp gain was driven by high-single-digit jumps at both Neiman Marcus and Bergdorf Goodman.
Saks Inc.’s same-store sales inched up 1 percent, led by strong performances from “gold range” women’s apparel, which is priced between bridge and designer, special occasion apparel, shoes, home, gifts, accessories, cosmetics and fine jewelry.
Among department stores, Sears said it beat plan, although while apparel sales have been slow, infants’ and toddlers’ reported double-digit gains.
In the discount sector, Kmart eked out a small comp gain, but said sales for seasonal apparel were weak.
One the down side, comps at Dayton Hudson’s department stores declined 4.8 percent, falling 10.8 percent at its Mervyn’s chain. Despite gains at Target, Dayton Hudson called the results “disappointing.”
Penney’s same-store sales dropped 8.7 percent, and the company said that career sportswear and outerwear were “very weak.” Other soft areas were women’s accessories, men’s and children’s.
Talbots, which gained 7.9 percent, said sales trends continued to be “very healthy.”
Gap eked out a 1 percent comp gain, with its core Gap division posting positive same-store sales for the first time since April. Its best division was Banana Republic, with high-single-digit comps, followed by Gap and GapKids, both of which turned in positive, low-single-digit comps. Old Navy was down, and Gap executives said the chain had tough comparisons against a gain in the mid-20s last year.
Holiday merchandise performed well at all divisions, and strong sellers at the Gap division were vests and colored sweaters, and cashmere was a “huge hit” at Banana.
At The Limited, sales were led by Limited Stores and Lerner, both of which posted 7 percent comp gains, and Lane Bryant gained 3 percent. Limited’s Express division slid 4 percent, marking its second month of declines, although sales were in line with plans. Margins were also down at Express, due to in-store and direct-mail promotions that were used to drive traffic.
The best merchandise categories were stretch pants at Limited Stores and polar fleece at Lerner New York.