IBI SAME-STORE SALES RISE 17% IN AUGUST
Byline: Melanie Kletter
NEW YORK — Intimate Brands Inc. reported August same-store sales leaped 17 percent, riding strength at Victoria’s Secret Stores and Bath & Body Works.
Most major retailers are scheduled to report same-stores sales results today. However, three other retailers also reported August sales results Wednesday:
American Eagle Outfitters, a fast-growing youth-oriented chain, posted a same-stores gain last month of 24 percent.
Hot Topic, another chain targeting young customers, reported comps surged 20.2 percent, driven by robust back-to-school sales. Selling was strong in all regions of the country, the retailer said.
Dollar General, the Nashville, Tenn.-based neighborhood-store chain, notched up a 7.6 percent comp gain.
Discussing IBI’s results in a conference call with analysts, executives noted that comp sales at Victoria’s Secret Stores climbed 22 percent, fueled by the launch of the Body by Victoria seamless collection.
“Pent-up demand for this program, customer notification programs and national advertising helped to drive sales of this collection beyond expectations,” Phil Mallott, chief financial officer, said during the call. “We should continue to benefit from this product line throughout the quarter.”
Sleepwear was also a strong performer, and overall sales at Victoria’s Secret stores were ahead of plan.
Victoria’s Secret Beauty notched comps gains in the mid-single digits, IBI said. There are now 447 beauty stores, including 417 shops adjacent to Victoria’s Secret stores, and 30 freestanding shops.
Looking ahead, comps in September are expected to be in the high-single digits to low teens for Victoria’s Secret Stores, including the beauty business, Mallott said.
Meanwhile, sales at Victoria’s Secret Catalogue dropped 11 percent and were below plan, due primarily to weakness in apparel and summer sale books, which did not offset robust sales of lingerie, Mallott said.
“We have been focusing on building the Victoria’s Secret brand, and that work has included migrating to a more brand-appropriate fashion pricing,” he said. “We are narrowing our sale windows in the catalogs and devoting more pages to lingerie — our core brand icon — and fewer to apparel.”
Sales at fall catalogs are running ahead of last year and are expected to pick up as the fall progresses and summer sales diminish, he noted. However, overall sales in the third quarter are expected to be lower than last year in the catalog division.
At Bath & Body Works, comps gained 9 percent, and merchandising margins were down slightly. Stores are now featuring the relaunched antibacteria line with new packaging and product line extensions, and the Beautiful by Nature color cosmetics line. Starting Aug. 23, the business moved to home fragrance as the main theme, with the introduction of the Preserve candle and soap launch.
The Limited Inc. owns 83 percent of IBI.
In other news, Limited said it completed the sale of its majority interest in Gaylan’s Trading Co. to a fund managed by private investment firm Freeman Spogli & Co., for $190 million. The transaction includes the sale of related real estate to CB Richard Ellis Investors.
Gaylan’s is now 60 percent owned by Gaylan’s management and Freeman Spogli & Co., and 40 percent owned by the Limited. Gaylan’s, which generated revenues of $220 million in 1998, operates 18 superstores carrying active lifestyle products. Limited had announced the sale in May as part of a restructuring effort including the spinoff of Limited Too and the repurchase of up to 15 million shares of its own stock.