ROUGH MONTH FOR NEIMAN’S, PENNEY’S
Byline: Evan Clark
NEW YORK — Early same-store-sales results from Neiman Marcus Group and J.C. Penney Co. painted February as a tough month, but signaled strength in women’s apparel.
Same-store sales at Penney’s department stores fell 2.1 percent for the four weeks ended Feb. 24, and the Neiman Marcus Group Inc. reported flat comps.
Neiman’s specialty retail stores segment, which includes Neiman Marcus Stores and Bergdorf Goodman, saw comps fall 0.4 percent below a year ago. With sales growth strongest on the East and West Coasts, top-performing categories were women’s designer apparel, precious jewelry and men’s shoes. Comparable revenues for the direct marketing division rose 2.3 percent, offsetting some of weakness in the specialty division.
In New York Stock Exchange trading Thursday, shares of Neiman’s fell $1.09 to close at $35.31, while Penney’s closed at $15.44, down 74 cents.
Eric Beder, an analyst with Ladenburg, Thalmann & Co., said that Neiman’s originally said comps would be negative for the month, so the flat finish was perceived as a positive.
He noted, though, that February was really a setup month for Neiman’s and that March is “the crucial month that determines if they make the quarter.”
The strength in women’s apparel was somewhat expected due to the luxury department store’s “butterfly” promotions.
This margin-saving promotion awards points to purchases which are, in turn, exchanged for novelties such as trips, tours or dinners.
“It’s taken off like wildfire; it’s very, very popular,” said Beder, who observed the combination of the program with other promotions makes the event “kind of like a sweeps period for retailing.”
Commenting on Neiman’s strength in women’s apparel, ING Barings equity analyst, Christine Kilton Augustine, said: “Designer apparel has been relatively strong for them for a number of quarters. It’s not a new trend.”
She said Neiman’s, in addition to others such as Federated Department Stores and The May Department Stores Co., “defiantly saw a pickup in women’s apparel” in the second half of 2000.
“The comparisons are very easy this spring,” she said of women’s apparel. “That bodes well for the category in the next couple of quarters. I am expecting, for Federated and May, that women’s apparel was relatively strong in February.”
She added that Federated and May should do well in the same-store sweepstakes for February, posting sales in line with or slightly below expectations.
“It’s our expectation that it’s not going to be a great month, but I don’t think it was a disaster,” she said of retail performance in general.
In addition to the 2.1 percent drop in department store comps for February, Penney’s reported that total department store sales dipped 3.8 percent, to $858 million, for the four-week period.
The women’s accessories and apparel categories each showed increases and were singled out as the division’s “strong categories.”
Catalog sales fell 10.7 percent, due primarily to the elimination of several sale and specialty catalogs, and comps at its Eckerd drugstore division jumped 12 percent for the month.
Earlier this week, the Suffern, N.Y.-based off-pricer, the Dress Barn Inc., reported its comps were down 4 percent for the month. Total sales for the four weeks fell 0.8 percent to $37 million.
Beder said February “is going to be a tough month. I think if [retailers] get 3 percent or 4 percent you’re going to be very happy.”