DECENT BUSINESS POST-YULE
Byline: Anamaria Wilson / with contributions from Kristin Young, Los Angeles / Rusty Williamson, Dallas.
NEW YORK — There is no rest for the weary.
The post-Christmas shopping week got off to a relatively strong start Wednesday and the surge continued Thursday. Shoppers nationwide maintained their season-long rush into the discount chains, but they also barreled into department and specialty stores scavenging for sales, yet keeping returns to a minimum. In addition, they snapped up some new merchandise, which offered specialty and department store retailers a faint glimmer of hope after one of the worst Christmas shopping seasons in memory.
“Our store was jammed on Wednesday. We’re probably in a better position than we were last year. We did a lot of our business on new goods and that actually helps the profit picture,” said Ed Burstell, vice president and general manager at Henri Bendel.
“A lot of the interest is in the new deliveries in designer and ready-to-wear. We have a good portion of our inventory in fresh goods, so we’re really positioned well to move into spring.”
Customers are still digging into sale merchandise, however, which at Bendel’s is hovering at about 50 percent off. “It’s just additional percentages on markdowns, to clear through the goods at this point, so for the next week to 10 days we’ll move whatever is left on the markdowns.”
The holiday top sellers at Bendel’s were cashmere turtlenecks, customized jewelry and novelty items from Tiffany Dubin’s Lair boutique, where celebrities like Brad Pitt, Jennifer Aniston, Giorgio Armani and Ozzy Osbourne were all spotted shopping in one day.
Sales for specific merchandise categories did suffer, however. “The business that got hurt was really the tourist-driven business — the first floor pick-up items like ornaments and different things like that,” said Burstell. “Luckily the inventory we had on that is not perishable. It’s something that we can carry over and sell again next year. So that didn’t turn into a big liability.”
Wal-Mart stores were inundated with shoppers as well.
“Our stores are busy, people are making returns, but people are shopping too — value shopping,” said Tom Williams, spokesman for Wal-Mart Stores. “Through the whole Christmas season they’ve been shopping for value. Now they’re continuing to look for the best possible price on products after the holiday,” said Williams. “We did have very strong sell-throughs on seasonal items” and so will not have to mark down seasonal merchandise as heavily.
“We were actually ahead of our sales on sell-through compared to last year.” That said, markdowns at the stores were still impressively deep. “It was very attractive to shop at Wal-Mart,” he said.
According to Williams, the advent of shopping cards or gift certificate cards has substantially cut down on returns at stores.
While shoppers did return to Bloomingdale’s to shop for additional merchandise, Michael Gould, chairman and ceo, said it was difficult to assess the results of post-Christmas sales this early.
“I think on Sunday or Monday we’ll have a pretty good feel for what post-Christmas was like. I thought there were parts of the store — cosmetics, apparel, and some accessory businesses — that were strong+.I think that on the whole it was a good day and some of the suburban stores were particularly strong.”
Markdowns at Bloomingdale’s were consistent with last year as slashing prices was not a priority. The store actually had fewer sales between Thanksgiving and Christmas than it did last year, Gould said. “Our inventories are in excellent shape from the point of view of getting out the merchandise that we don’t want to carry forward,” he said. “We’ve been very relentless about bringing in new merchandise. We need to continue to push newness into the building and that’s what we’re doing.
“I really feel great. This is the first year in 11 years of Christmases at Bloomingdale’s that there are no tables on the main floor. You can walk through the first floor and not bump into a handbag table and our business is up,” he added. “We’re thinking about how we can make it easier for people to shop. The customer wants that. That’s part of the value equation.”
Going forward, Gould is hopeful but realistic. “I think that we have enormous opportunities in the spring season. There are a lot of good things out there. I think the tough part of the spring season will be those locales where you have a high tourist business, like New York and Chicago. They are going to have a tougher season than other places, and we have to figure out how to work around that. That’s the real challenge, that’s what we’re working on.”
But while department stores were busy post-Christmas, some specialty stores were quiet. After a strong holiday season, traffic at Scoop boutiques has ebbed in the last two days. “For us, a lot of our customers are on vacation. So people that are buying now are picking up a great dress for New Year’s or a great sale item. Business has been consistent, but our strength was really pre-Christmas,” said Stefani Greenfield, co-owner of Scoop.
While there are some racks of sale merchandise at her boutiques, overall her markdowns are limited. “We had very few bad sellers. The depth of our markdowns is basically 50 percent. It’s still a profitable markdown percentage.”
A healthy turnout of consumers ventured to stores on the West Coast as well, although retailers were reluctant to call them bargain shoppers. According to retailers such as Fresno-based Gottschalks, Hayward, Calif.-based Mervyn’s and Seattle-based Nordstrom Inc., stores were busy, but not because of any deeper markdowns than usual at this time of year.
Jim Famalette, chief executive officer of Gottschalks, said the chain’s inventories are “in great shape” and the retailer will not be left overstocked after the post-Christmas sales.
Famalette said he takes issue with the portrayal that this was the worst retail season in several years.
“We have a better margin than last year,” he said. “I don’t think you can generalize.”
At Mervyn’s, customers were snapping up holiday-themed merchandise slashed 50 percent off, fine jewelry at 75 percent off, and women’s apparel at between 30 and 50 percent off. Cotton cable-knit sweaters, at 40 percent off, were a particularly good seller while women’s and men’s Levi’s jeans were marked at $29.99.
Returns were seemingly not a priority for West Coast shoppers either. “The stores were experiencing more customers coming in and buying new merchandise rather than returning things they had received as gifts,” noted Rachel Schey, a spokeswoman for Mervyn’s. “They were taking advantage of the sales we had going on.”
Schey noted that the chain had not yet received spring shipments.
When asked whether customers were becoming conditioned to expect sale prices, she said, “We’ve always offered big brands at small prices. It’s something that we’ve always lived by, and we will continue to offer good value and good prices. We haven’t changed our methods at all.”
At Nordstrom, the stores the day after Christmas were characterized by a spokeswoman there as “busy” but with about the same amount of traffic as last year.
Except for a men’s half-yearly sale, Nordstrom did not do anything special in terms of promotions this Christmas season. The company declined to offer sales information before its December sales report on Jan. 7.
While there was some merchandise that was marked down, “We wanted to make sure we are competitive and the merchandise we offer is compelling,” said Shasha Richardson, the spokeswoman. “We didn’t enter into a highly promotional area.”
At Neiman Marcus in Dallas, post-Christmas business is on plan with shoppers drawn by clearance merchandise, cosmetics and fresh resort styles, with denim a hot category, according to Ken Downing, vice president.
A spokesman at Elder-Beerman, the moderate department store chain with a big presence in the Midwest and Southeast, said sales on Wednesday and Thursday were above plan and that inventories are lean. “Certainly we have merchandise to clear and this is definitely the time to do it. Even women’s, misses’ and junior outerwear beat plan on Wednesday, and it had been down all month before then,” he said.