MAJOR MARKDOWNS BUY GAINS FOR BIG CHAINS IN JANUARY
Byline: Catherine M. Curan
NEW YORK — January sales were strong at major chains, but the gains were attained through heavy markdowns and in many cases reflect easy comparisons to poor results in January 1993.
Floods in California and Texas crimped sales there, and border stores were hit by the devaluation of the peso. In general, however, retailers said apparel had a strong month, putting inventories in line for spring merchandise, which so far seems to be getting a good response. But the intense clearance activity will eat into the bottom line. Thomas Tashjian, analyst at First Manhattan, noted that January is traditionally a major markdown period, when apparel retailers lose money.
As for fourth-quarter profits, he observed, “We’re expecting results to be about flat overall. Sales are higher, but companies will be less profitable because of margin pressure.” J.C. Penney knocked out a 14.4 percent same-store sales gain, with women’s and men’s apparel pacing the business. Total sales rose 15.1 percent to $751 million, while catalog sales declined 2.9 percent to $239 million. At Federated Department Stores, sales were better than expected, boosted by the onset of cold weather in most of the country, said Allen I. Questrom, chairman and chief executive officer, in a statement. Same-store sales grew 7.4 percent to $605 million including $241.8 million from Macy’s. A spokeswoman said women’s apparel performed well, particularly sportswear and dresses in better and moderate prices, and special sizes. Pacing department stores, Bon-Ton racked up a 26.9 percent same-store sales gain, but attributed the leap to comparisons against 1994.
Limited Inc.’s same-store sales declined 5 percent, but margins improved and earnings are seen up at least 30 percent in the fourth quarter. For the year ended Jan. 28, Limited expects a 15 percent earnings gain to $448 million, or $1.25 a share. January sales were slightly below expectations. Same-store sales at Limited Stores plunged in the high 30s; Express was flat; Victoria’s Secret stores rose in the mid-teens; Lerner’s declined in the low double digits. Inventories were up 12 percent at Express to meet demand, while Limited and Lerner’s inventories were slashed. Overall inventories are up 6 percent and on plan. “Disappointing results at Limited and Lerner are more than offset by outstanding performance at Express and Victoria’s Secret,” the company said. Neiman Marcus posted a 9.1 percent same-store sales increase, and total sales rose 5.9 percent to $128.3 million. Neiman Marcus comparable-store sales grew substantially, aided by moving a promotion to January from February. Bergdorf Goodman’s same-store sales rose in the mid-to-high single digits, and Contempo Casuals declined in the low teens.
Sears, Roebuck & Co.’s Merchandise Group registered a 5.7 percent domestic same-store sales gain, with sales up 7.3 percent to $1.7 billion.
Dayton Hudson posted a 5 percent same-store sales gain, and sales rose 11.1 percent to $1.2 billion. “Target was on plan, Mervyn’s showed a strong increase and the department stores did slightly better than plan,” said Robert Ulrich, chairman and ceo, in a statement. Same-store sales at Target were up 4.1 percent; Mervyn’s, up 11.6 percent; department stores, up 0.3 percent. Inventories are in line at all three divisions, the company said.
May Department Stores Co. posted a 7 percent same-store sales gain, while total sales rose 12 percent to $602 million. At Carson Pirie Scott, clearance sales at eight units being sold to Dayton Hudson contributed to a 32 percent same-store sales gain. Same-store sales for the balance of the chain grew 4.7 percent, with total sales up 18 percent to $60.9 million.
The Broadway said comparable-store sales were up 10.2 percent. Total sales rose 13.2 percent to $133.6 million. David Dworkin, ceo, cited shoes, men’s wear, home goods and cosmetics as the leading areas.
Wal-Mart Stores slipped somewhat, with same-store sales up 6.8 percent against 7.2 percent for the year. Total sales grew 17 percent to $5.9 billion in the month and 22 percent to $82.5 billion in the year. Kmart’s same-store sales rose 4.5 percent; total sales were flat at about $2 billion.
While most stores showed robust gains, there were notable exceptions. Clothestime Inc.’s same-store sales plummeted 27 percent; Charming Shoppes was down 16 percent; Eddie Bauer, down 8.
Among regional discounters, Ames Department Stores was up 20.7 percent, while Caldor’s same-store sales rose 8.4 percent. Consequently, Caldor projected it will have a per-share earnings gain in 1994, but Bradlees said it will post a profit below last year’s despite a January sales lift of 5 percent. Gap Inc. said greater markdowns led to a 7 percent same-store sales gain, with total sales up 20 percent to $213 million. Ann Taylor Stores rose 17.3 percent. Talbots same-store sales grew 5.5 percent; total sales surged 26 percent to $51.1 million. — Fairchild News Service