Byline: Carol Emert

WASHINGTON — Apparel specialty stores continued to lose ground in January, compared with the general merchandise and department stores sectors, according to seasonally adjusted data the Commerce Department released Tuesday.
The report removes seasonal and holiday factors from monthly sales. On this basis, specialty store sales fell 0.5 percent in January from December 1994, while general merchandisers posted a 1.1 percent gain and department stores rose 1.3 percent. Specialty store sales have been in the doldrums since February 1993, according to the Commerce Department, and some economists are beginning to doubt whether the trend will turn around soon.
“The striking thing is that by all other signs, people are out there spending money,” said Ira Silver, chief economist with J.C. Penney Co. “To see apparel specialty stores so weak in this sort of environment is definitely unprecedented.”
Rosalind Wells, a retail analyst and president of Wells & Associates, New York, noted that two of the most successful specialty stores, Talbots and Ann Taylor, cater to professional women, while youth-oriented stores such as The Limited and Esprit are not doing as well.
According to the Commerce report, specialty store sales rose 5.7 percent in January from January 1994, to $9.03 billion from $8.5 billion. But the jump is less dramatic when viewed against the 5.3 percent drop in sales in January 1994, brought on, in part, by ice storms and the California earthquake.
General merchandise store sales rose 6.5 percent last month from January 1994, to $24.4 billion from $22.9 billion. Department store sales grew 7.8 percent, to $18.9 billion from $17.5 billion.
In the November 1994 through January 1995 quarter, specialty store sales rose 3.7 percent compared with the year-ago period, while department store sales gained 8 percent and general merchandisers’ grew 6.2 percent, according to the report.
Sandra Shaber, senior vice president of the WEFA Group, an economic forecasting firm in Bala Cynwyd, Pa., said apparel sales overall may improve, now that auto dealers and furniture stores are reporting declining sales. Durable goods sales declined 0.4 percent in January against December.
“The stores still have to give [shoppers] a reason to buy,” said Shaber. She deemed current fashions “dreary.”
Shaber and Silver said the modest 0.2 percent increase in overall retail trade for the month should help dissuade the Federal Reserve from raising interest rates again in the near future. The Fed has raised rates seven times in the last year to stem what it considered “unsustainable” growth likely to result in inflation.
“We may be on the glide path to the soft landing,” said Silver, referring to the Fed’s goal of slowing economic growth without slumping into a recession. “That’s what it looks like and that’s what I’m hoping.”