POST-HOLIDAY CROWDS FILL STORES, BUT THEY WON’T SAVE THE SEASON
Byline: Sharon Edelson — With contributions from Mark Tosh, New York; Joanna Ramey, Washington, and Rusty Williamson, Dallas
NEW YORK — While Christmas shoppers were generally restrained as they hunted for bargains this year, they seemed particularly motivated on Tuesday by post-holiday sales offering 25 to 70 percent off.
Retail analysts said that while the week after Christmas is exceedingly important, most stores have already factored this business into their holiday plans. This week’s activity, therefore, may do little to alter what for many is being seen as disappointing season.
“Traffic this morning was very heavy but particularly focused in Trim-a-Home and other Christmas departments,” said Michael Steinberg, chairman and chief executive officer of Macy’s West, speaking by telephone from San Francisco. “There is a reasonable amount of traffic in the apparel areas, but nothing really spectacular.
“The day after Christmas is a very, very big day,” Steinberg continued. “Overall, we were apprehensive until the last three or four days. We’re going to come out reasonably on plan. It depends a little on this week.”
However, Steinberg said apparel sales have been hampered by the unusually warm weather in California, where temperatures have been in the 60s and 70s.
“The stores were open early, at 8 a.m., but customers seemed to come in later, around 10 or 11 a.m.,” said Jeffrey Sherman, president of Bloomingdale’s, here. “By noon, the stores were very active. This is always a big sales week. With a little help from this week we could still come out on plan for the month.”
Bloomingdale’s ran an insert in the New York Times on Monday and an ad in the Times on Tuesday touting 20 to 50 percent off a variety of merchandise.
The Mall at Short Hills in Short Hills, N.J., was “busier today than it was even on Christmas Eve,” said Craig Perry, general manager on Tuesday. Perry said most people shopping seemed to be making new purchases, not simply exchanging or returning items.
Traffic was also heavy on Tuesday at The Somerset Collection in Troy, Mich. Rebecca Maccardini, director of operations of Forbes/Cohen Properties, the managing partner of the mall, said, “We maxed out the parking spaces by 11:30 a.m. It was more people spending after-Christmas money and looking for good sales rather than returns. There certainly is a buyer out there today, a buyer for bargains.
“At The Somerset Collection, prior to Christmas, the prices held pretty well,” she said. “Every store had a little on sale, but compared to more middle market centers there was less price promotion.”
There was plenty of that elsewhere. At Lerner New York, signs advertised an extra 30 percent off red-line merchandise. Prices were unusually low. Turtlenecks, for example, were $7.99, stirrup pants and soft ribbed sweaters were $14.99 each.
The one consistent bright spot in the retail picture this holiday has been upper-end specialty stores, whose customers are more insulated to economic downturns.
Barneys New York, which has been moving in resort and early spring merchandise for some time, restrained its discounting during the holiday season. But the store pulled out the stops with a 60 percent off sale on Tuesday.
“We’re running about 50 percent ahead of last year in terms of sales,” Charles Bunstine, Barneys’ president said Tuesday. “For the month, we’ll probably end up between 17 and 20 percent ahead. Today’s business is just great.
“We think post-Christmas sales combined with new merchandise will make this the best January we’ve ever had,” Bunstine added. “We ended up coming into December pretty clean so we didn’t have a great deal of sale merchandise. Our intention was to start the sale the day after Christmas. We went with deeper markdowns early to shorten the sale period.”
Saks Fifth Avenue reported its New York flagship was “loaded with customers” by noon on Tuesday.
“We’re very busy,” said Philip Miller, chairman and chief executive officer. “We had a strong opening. I think it’s the favorable weather, plus we were aggressive about our post-Christmas sale advertising.”
The retailer ran a double truck ad in the New York Times on Monday and radio in most major markets.
Miller said inventories are in line with plan, but bigger than a year ago based on Saks’ expanded sales base. The chain will pick up “a couple hundred million dollars in sales this year” and had to support that planned increased with higher level of inventory.
Carson, Pirie, Scott, Milwaukee, said after-Christmas traffic was mostly even on Tuesday, a good sign, according to store executives, who had planned the day’s business to be down.
“Many people had the day off last year because Christmas was on a Sunday,” said Ed Carroll, executive vice president of Carson’s. “This year many people had to return to work. But there’s still an appetite for merchandise.”
Carson’s customers are responding to holiday markdown racks, where prices are typically slashed 50 percent, Carroll said.
Traffic at the five Washington and Baltimore-area Nordstrom locations was brisk, particularly in men’s wear. A Nordstrom spokeswoman said that in women’s wear, as before Christmas, many customers were focused on value-priced, high-end goods like leather jackets and blazers, reduced 25 percent to 33 percent from their original $398 to $550.
Traffic jams clogged the roads entering the huge, regional mall Tysons Corner Center, south of Washington in McClean, Va., around mid-morning. Despite the crowds, general manager Ken Blue expects mall-wide sales to be up about 3 percent against last year’s holiday season. “But this week may push us over that,” he said. However, many higher-end retailers were showing stronger sales than those with moderate prices, Blue added.
Like many other retailers, J.C. Penney Co. reported lackluster sales for Christmas, but strict inventory controls should keep it from having as much “inventory hangover going into January as it did last year,” said Todd Slater, an analyst at UBS Securities. Slater said Penney’s gross margins were better than expected for the past two weeks. As a result, he said, the fact that Penney’s sales were below expectations may “not have as much of a margin impact as it would have on other stores.”
Kmart Corp. also hinted its sales were below plan for the season, but a spokesman said the discounter would not “move too far off our planned promotional activity.” Sales at Kmart were strong over the final days before Christmas, after being soft for much of the previous three weeks.