POST-YULE SALES OK, BUT NO GIFT
NEW YORK — The swarm of bargain hunters in stores this week did little to pump up the bottom line, but the turnout managed to ease some of the anguish merchants have felt for most of the holiday season. At Kmart, sales Monday through Wednesday have been “very good, but not enough to change things materially,” said a spokesman. He added that the chain is sticking with its estimate of about a 3 percent comparable-store gain for the month, which is slightly under the plan. Kmart took a more promotional stance than usual this year, making deeper price cuts and ballyhooing them in circulars. “From all indications, we’re having a very good week and exceeding last year, especially in jewelry, cosmetics, intimate apparel and computers, vacuum cleaners and sewing machines,” a spokesman for Sears Roebuck & Co. said. “Right now, we are where we hoped to be — right on plan.”
“I don’t think [this week] will have a huge impact,” said David A. Poneman, analyst at Sanford C. Bernstein. “A strong business is constructive, but very few people do business after Christmas that is material for more than one day.”
“The month of December overall will be considerably less disappointing than the pre-Christmas business alone,” said Jeffrey Sherman, Bloomingdale’s president. “I can’t answer on profitability yet, but volume is surprisingly good this week and helping make December a better month overall.”
“So far, this week is very good for us, as I suspect for a lot of stores,” said Brian Kendrick, vice chairman and chief financial officer of Saks Fifth Avenue. He said Saks was up 20 percent Monday through Wednesday and anticipates making its plan for November and December, a plan he characterized as “very aggressive this year.” J.C. Penney said the post-Christmas rush was at least 5 percent ahead of last year’s, the same pace that prevailed through this month at the chain. This week, women’s apparel continued to turn in higher gains, with business ahead by at least 8 percent, according to W. Barger Tygart, senior executive vice president and director of merchandising and support services.
Casual separates, novelty sweaters, sportswear, cosmetics, lingerie, innerwear, and fashion and fine jewelry — most often dangling clearance tags — have played starring roles at the cash registers since Monday.
At Neiman Marcus, clearance shoppers favored private label cashmere and novelty sweaters; designer sportswear from vendors such as St. John, Escada, Giorgio Armani Le Collezione, DKNY and Calvin Klein; outerwear, and intimate apparel, particularly cleavage-enhancing items and lounge sets, according to a spokeswoman. She said the level of shopping was about the same as last year.
Resort sportswear at regular prices from makers including St. John and Escada continued to show strong checkouts this week, she added.
Arnold Zetcher, chairman and chief executive officer of Talbots Inc., which has been reporting stronger figures than most chains all year, said, “The crowds were unbelievable this week,” and added that sales are running around 15 percent ahead of last year and ahead of the pre-Christmas trend. “The goal is to virtually cleanse ourselves and start over in February,” Zetcher said, referring to Talbots’ traditional post-Christmas sale, offering 35 to 50 percent off about 90 percent of the merchandise. It began Monday and runs to the first week of February.
“Since we only have two major sales a year, it’s very important to get the selloffs we expect,” Zetcher said. The other sale runs from late June to the first week in August. The Talbots post-Christmas clearance catalog set a one-day record Monday, posting $2.5 million in orders. The old record was $2.2 million.
For retailers, this week marks a major volume period, but it is still small in comparison to the week before Christmas. According to Edward F. Johnson, an analyst at Johnson Redbook Service, it accounts for 8 percent of December sales versus 28 percent in the week before Christmas.
“If it’s a soft week, it could bode for a difficult January,” Saks’ Kendrick noted.
Many stores are pushing the same steep markdowns as a year ago, generally 30 to 50 percent off seasonal goods.
Most were conservative in stocking inventory, expecting only mid-single-digit gains at best for the holiday period. The surprising strong November raised expectations, and when sales came in under plan, a wave of disappointment set in.
“We kept our stocks pretty well under control, and well balanced,” Saks’ Kendrick said, adding that the chain offered markdowns no steeper than last year’s. Some ready-to-wear areas at Saks had 25 percent reductions on previously marked-down goods, yielding 50 percent markdowns. Sherman of Bloomingdale’s said, “We have always viewed the week as an opportunity, but it’s bigger this year than we all thought. Our stores are packed. The consumer keeps pushing Christmas later and later. Now the whole psychology has pushed it past Christmas.”
He said markdowns were no steeper than in past years — 30 to 40 percent on seasonal ready-to-wear; 50 percent on Christmas cards and wrapping paper.
The company did start a new “save-a-sale” strategy to encourage sales associates, through financial incentives, to get shoppers to exchange rather than return purchases. “It’s working well,” Sherman said.
Department store post-Christmas sales at Montgomery Mall in Bethesda, Md., are running about 8 percent above last year’s, compared with a pre-Christmas gain of between 6 and 7 percent, and the day after Christmas was the most heavily trafficked day of the season. There were 41,000 cars and more than 100,000 people in the mall, said Steve Johnson, director of marketing for the mall. Executives at the mall expect to exceed December’s sales plan by 2.2 percent.
We’re getting close to double-digit growth over last year for the month,” although post-Christmas sales won’t change the projection or the final tally, he noted. At Tysons Corner Center in MacLean, Va., the day after Christmas was up 15 percent over a snowy Dec. 26, last year, while December traffic generally has been up about 10 percent, said Kem Blue, general manager. Crowds formed at 7:45 a.m. in front of department stores, which opened at 8 a.m., he said.
“We project sales will be 7 percent to 8 percent above last December. That’s the original plan, and we seem to be doing it,” Blue said.
In the District of Columbia, Hecht’s downtown department store was booming at lunch time Thursday, although one shopper, Jean Chipouras, a government budget analyst, said the prices were no lower than before Christmas.
“In fact, I bought a cashmere coat here three weeks ago, and it was cheaper then than it is now,” she said.
Most of the rtw at Hecht’s was marked down about 20 percent, with some Christmas items marked down 50 percent.
Traffic was lighter a block away at Woodward & Lothrop’s flagship and discounts were heavier, with some dressy silk and acetate blouses marked down 40 percent. Sales have been disappointing at the store this season, according to president and ceo Robert Mang.
Sweaters were also being heavily promoted, with long tables full of brands such as Jessica Tierney and Tidewater Traders set up in the aisles with “50 percent off” signs. Peebles Inc., which operates 57 department stores in small Middle Atlantic and Southern markets, expects December comparable-store sales to increase only about 2 percent over last year, which would leave the chain between 1 and 2 percent below plan. Sales the week after Christmas account for only about 7 percent of sales for the month, said Mike Moorman, Peebles chairman and ceo.
Comparable-store sales the first three days after Christmas were up 13 percent, a spokesman said, attributing that in part to weather factors.
Specialty Retailers Inc., the Houston-based chain that operates family-oriented department stores, said sales this week are up by 2 to 3 percent against last year, but blamed the meager numbers on torrential rainstorms that commenced Monday night, according to Myrna Phillips, senior vice president for marketing.
SRI is projecting to close the month with gains of 8 to 9 percent.
“Everybody is into bargains,” said Phillips. “They’re really going for the sale and clearance items. Business on Monday was bigger than Sunday and Monday combined last year. It’s almost as if some people held off and figured they could buy the day after Christmas.”
At Younker’s, based in Des Moines, Iowa, chairman Tom Gould estimated that sales against last year were holding to about 5 percent for the final holiday shopping week, a pace seen throughout December at the chain.
Hot items included novelty sweaters from Marisa Christina, Susan Bristol and Eagle’s Eye.
“Customers have been looking for bargains all season,” said Gould. “The trend is continuing after Christmas.”