HITTING WHEN IT HURTS: BLIZZARD OF ’95 LAYS A BIG CHILL ON STORES
NEW YORK — It wasn’t a disaster, but Tuesday’s snowstorm, stretching from St. Louis to New England, put a big crimp in Christmas business, adding to the woes of the season and leaving little time for stores to make up lost revenues.
Retailers refuse to say die, however. Several said Tuesday they could still score this weekend and that consumers were playing it smart — listening to forecasts and hitting the stores before and after the storms. Some said shoppers were out in force Monday night, anticipating Tuesday’s storm.
In Manhattan, there was a break in the storm around lunchtime and shoppers materialized on the selling floors. Bloomingdale’s main floor accessories and cosmetic departments were bustling, while designer sportswear on the fourth floor seemed quiet. The Ralph Lauren, Giorgio Armani and Calvin Klein departments were empty around 2 p.m., despite inviting sale signs of up to 40 percent off.
Saks Fifth Avenue and Macy’s reported no significant falloff in traffic at their Manhattan flagships, although a Macy’s spokeswoman said business at suburban stores, where heavier snow fell, was off “compared to what it usually is during a regular day at this time of the year.”
In St. Louis, commuters made it downtown Tuesday morning before 6 to 8 inches of snow piled up. As a result, traffic at the downtown Famous-Barr was reported “better than expected,” with some noon shoppers said to be waiting in line at checkout counters.
At some of the chain’s suburban locations, business was holding up fairly well despite snarled traffic on highways. “We’re not mobbed, but we’re doing OK,” a spokeswoman said.
Saks Jandel in Chevy Chase, Md., had a strong day Tuesday until about 4 p.m., when rain turned to sleet and slush, said Peter Marx, vice president. The upscale store has not seen a noticeable impact from the partial government furlough this week, but Marx said that if uncertainty over the federal budget continues, it will be bad for Washington-area businesses.
Weather predictions through the day were not what retailers wanted to hear. At 6 p.m. Tuesday, the forecast was for six to 10 inches of snow to accumulate through the night and at least another inch through today in the New York metropolitan area. More gloom came from Wall Street.
Steven Kernkraut, retail analyst at Bear Stearns & Co., downgraded his ratings on The Gap, J.C. Penney and Nordstrom, noting that the Christmas selling season is “turning out to be horrible.”
Kernkraut added that Tuesday’s snowstorm in the Northeast will also take a further toll on sales for the next couple of days. He cut his rating on Gap to hold from attractive, Penney’s to unattractive from hold and Nordstrom to attractive from buy.
Gap stock slipped 7/8 to 44 3/8, and Penney’s lost 3/4 to 46 1/8 on the New York Stock Exchange Tuesday. Nordstrom eased 1/8 to 40 3/8 in over-the-counter trading.
Johnson Redbook Service reported that December sales through Sunday were down 2.4 percent on a seasonally adjusted basis from November’s pace and up 3.9 percent from year-ago figures. Redbook noted that sales for the third week in December were generally below plan. It also stated that the cold stormy weather in most of the nation helped auto-supply sales, “but general merchandise categories remained lackluster.”
The fourth week of December will be going against strong year-ago figures, so “increases will be hard to come by.” However, Redbook said, the fifth week, which includes the last shopping day before Christmas, should show a good year-to-year increase.
“In order to have a decent season, stores really need a strong week,” said Barry Bryant, an analyst at Rodman & Renshaw Inc. Bryant noted that the heavy snow could spur sales of outerwear and accessories, rubberized footwear and automotive supplies. “I think Chanukah [which began Sunday night] is going to make the latter period of this season in comparison much stronger than last year,” he said. “Obviously, it won’t be more than a couple of points difference, but on the margin, a couple of points is the whole game.”
No early store closings were reported on Tuesday, and most retailers put on an optimistic face.
Craig Perry, general manager of The Mall at Short Hills in New Jersey, said traffic was “not up to par” with other days this season, but “certainly not a disaster.”
He said many shoppers lugged more than one shopping bag on Tuesday and that the mall was busy Monday night because shoppers anticipated the storm.
“This is really the crucial week when business is driven,” Perry said. “Certainly, if one has their druthers, we would rather not see a snowstorm of this magnitude. On the other hand, it really is putting people in the mood.”
Garden State Plaza in Paramus, N.J., was “minimally” affected by the snow and store traffic was steady, said Lucille DeHart, director of marketing. The mall had no plans to close early Tuesday.
“Christmas is coming regardless of the weather,” she said. “Shoppers are being troopers. They’re still coming out.”
If the forecasts for more than 18 inches of snow are accurate, however, DeHart said “at worst” the mall’s opening today could be delayed.
At noon Tuesday, Bob Guerra, the assistant general manager at The Westchester Mall in White Plains, N.Y., said traffic was very good despite the weather.
He felt the inclement weather would not affect overall holiday sales since the mall was busy during the storm and, “If it does snow heavily [Tuesday] evening, it would probably come after we close,” he said. “And if it does come earlier, business might be a little soft, but we will make it up after the weather clears up.”
“The bottom line here is that Christmas will come and [consumers] do have to shop. It’s the last week they have, so I think they will be out in force anyway.”
Joe Ettore, president and chief executive officer of Ames Department Stores, said that around 1:00 p.m. Tuesday, the storm had not yet hit areas where Ames units are situated.
“Eventually, the storm is going to catch up with us, but until then, we’re okay.”
He added, “In Washington, they’re talking about a lot of freezing rain later on, so that could be worse for us then snow.”
Steven Milstein, vice president of Burlington Coat Factory, said in the past few weeks, his Christmas business has been hurt by snowstorms. “The last two Saturdays that we had snow, business was off. So I hope the storm won’t throw [overall Christmas business] off, but I think it will.” On the positive side, Milstein noted that once news of the impending snow storm was out, Monday’s business at the 230-unit Burlington, N.J.-based retailer surged, though “it’s generally been off today, since people are afraid of getting stuck in the snow.” He said his company could make up the business after the storm passed and predicted “it’s going to be very busy when it clears up on Thursday, Friday and Saturday.” Regarding possible store closings, he said, “We listen to weather reports, and we usually call the local police precincts to see what they are doing. If they start closing the roads down, we’ll close the store. If there are no customers in the stores and three feet of snow outside, it’s crazy to stay open.”