APPAREL SALES UP 1.3 PERCENT IN AUGUST

Byline: Alison Maxwell

WASHINGTON — Back-to-school shopping gave apparel and accessories stores a boost in August after a couple of sluggish months, but the return to books didn’t mean much for department stores.
That was the picture painted by the monthly report on retail sales released Tuesday by the Commerce Department.
Last month’s sales at apparel stores were up 1.3 percent from July, and 7.4 percent for the year. It came after two months of month-to-month declines at these stores and was the best gain since April, when sales rose 1.9 percent from March. July’s sales decrease at apparel and accessories stores, originally reported at 0.4 percent, was revised to 0.9 percent.
General merchandise stores — discount, department and variety stores — posted a seasonally adjusted sales increase of 0.3 percent in August, following a 0.5 percent revised increase in July. Compared with August 1998, sales were up 8.5 percent. However, sales at department stores alone, excluding leased departments, were up only 0.1 percent for the month, after a revised July increase of 0.5 percent. Year-over-year sales at department stores were up 7.6 percent.
“Mass retailers showed strong sales, particularly those selling casual apparel and other school-related items,” noted Robert Verdisco, president of the International Mass Retailers Association.
“In terms of back-to-school apparel, the relatively poor performance of department stores continues to be a troubling trend,” Verdisco said. “Conven-tional department stores have been working to attract teen shoppers to their juniors department, but August results indicated that conventional department stores have yet to bond with this important back-to-school segment.”
Ira Silver, an economist with the J.C. Penney Co., said that although apparel stores recorded better sales for the month, “it is just a partial makeup for two very weak months.” Averaging the past three months, apparel stores show a decline of 0.1 percent, he noted. He said that the average monthly increase for general merchandise stores, department stores and apparel stores has remained at about 0.4 percent for the year.
Overall, U.S. retail sales surged 1.2 percent in August to $252.4 billion — the largest increase in six months, with automobile sales and rising gasoline prices big contributing factors. On a year-over-year basis, sales were up 14.2 percent. July’s sales increase of 0.7 percent was revised to 1 percent. Excluding the auto sector, August’s retail sales increase was 0.7 percent.
“The consumer isn’t slowing down at all. He is still spending at full speed,” said Larry Horowitz, a senior economist at Primark Decision Economics in Boston. “This will convince more people than before that the Federal Reserve will raise rates before the end of the year.”
“I don’t see any collapse, but I don’t see any acceleration in retail sales for the rest of the year,” Silver said.