EARLY JANUARY RESULTS POSITIVE FOR RETAILERS
Byline: Jennifer Weitzman
NEW YORK — Cold weather and aggressive clearance activity produced a decent January selling period for a handful of major retailers reporting the month’s sales on Thursday, beating expectations.
While most of the industry reports January sales next Thursday, Neiman Marcus Group, TJX Cos., and The May Department Stores Co. cited comp-store gains averaging around 4 percent.
Analysts, though satisfied by the performance, read little into the numbers, noting January is always awash in promotional activity and generally not a big harbinger of spring, which they expect to be tough. The softening economy, a rash of layoffs across several industries and last year’s depressed stock market have left consumers feeling much less confident about the economy. The Consumer Confidence Index for January, issued Tuesday, was the lowest in four years. To stimulate consumer spending, the Federal Reserve Bank lowered interest rates on Wednesday, for the second time in January.
Nevertheless, retailers reporting Thursday said that they were able to rebound with clean inventories from a rather dismal December.
“January was actually an OK month,” said Deutsche Banc Alex.Brown retail analyst Marcia Aaron. She added that December’s snowstorms and January’s cold, but primarily clear weather, and discounts drove sales. She said January has little bearing on February, which rides more on consumer attitudes toward spring lines. She expects “lackluster demand” for the first half.
Credit Suisse First Boston’s broadline retail analyst Michael Exstein agreed, noting that although January was better than December, “it’s too small to draw conclusions about the upcoming year.”
Luxury retailer Neiman Marcus Group reported its same-store sales, including the Neiman Marcus chain and Bergdorf Goodman, rose 5.5 percent in January. The firm said growth was geographically even, with about one-third of its Neiman Marcus stores reporting double-digit gains.
The company said top performers were fine apparel — part of its strategy to increase designer collections and be less dependent on bridge — as well as intimate apparel, gifts, men’s clothing and shoes.
The company warned in November that its second-quarter results would be flat as a result of recent disappointing sales trends, which tempered optimism.
May Co., operator of 427 department stores including Lord & Taylor and Filene’s, said same-store sales rose 3.4 percent. As reported, the St. Louis-based firm plans to purchase nine department stores from Saks Inc. for about $310 million, including inventory.
J.P. Morgan Chase’s Shari Schwartzman Eberts said in her 2001 outlook for broadline chains, that while she is “cautious” on the group, she expects department store same-store sales growth to rebound first, relative to discount stores, due primarily to easier comparisons. She forecasts department store same-store sales to rise 2.1 percent, versus the estimated 1.3 percent gain in 2000.
Off-pricer TJX Cos., parent of T.J. Maxx and Marshall’s, said same-store sales were up 4 percent, ahead of plans.
Edmond English, president and chief executive, said by emphasizing “home fashions in January, we were able to drive sales during this typically transitional month for apparel.”
Entering February, English said store inventories are in “great shape” to receive fresh shipments of spring apparel.
Cache Inc. said same-store sales increased 7 percent during the month. Cache’s chairman Brian Woolf said that “sales results included a greater percentage of regular-priced merchandise business.” He said the company remains very “optimistic” for the balance of the year.
Christopher & Banks, formerly Braun’s Fashions, reported an 18 percent increase, which exceeded expectations. Many specialty chains have been showing comp-store gains in recent months that outpace the industry overall.