BIG RETAILERS HAVE STRONG SALES FOR FEB.

Byline: Thomas Cunningham

NEW YORK — With consumer confidence holding up, and more color in the apparel assortments, many major retailers on Thursday posted strong February sales results and expressed confidence in spring selling going forward.
Robust Valentine’s Day gift-purchasing and President’s Day sales also raised results, with specialty chains, notably Old Navy, Banana Republic, Ann Taylor, Victoria’s Secret Stores and Talbots continuing to outperform other retail sectors.
The LJR Redbook same-store index climbed 5 percent in February, compared to 6.8 percent a year ago, according to John Pitt, of LJR Redbook. Specialty apparel chains and regional department stores performed above trend in the month, he said.
February is a transition period from winter to spring selling, meaning traffic in stores is generally light and merchandising messages are mixed. However, last month’s figures suggest spring selling should continue to be healthy, although March figures may be adversely affected by the later Easter, which falls on April 23 compared with April 4 last year.
A few teen- and youth-oriented chains grew at eye-popping rates. Hot Topic turned in a 31.2 percent gain and Gadzooks’ same-store sales jumped 25.5 percent. Express continued on track, as same-store sales climbed 12 percent and merchandise margins were up over last year.
Sweaters and embroidered items were bestsellers at specialty chains, while department and high-priced specialty stores reported strong sales of designer and bridge apparel, cosmetics, jewelry and accessories.
Luxury chains Neiman Marcus and Saks Fifth Avenue turned in solid same-store sales gains, as did several department stores. According to Shari Schwartzman Eberts, analyst at JP Morgan, Federated Department Stores, May Department Stores and Saks Inc., were ahead of plan for the month, indicating that consumer confidence is high despite fear of rising interest rates. “We saw strong early spring sales in many markets,” Eberts said. “It just goes to show you that the consumer is still with us.”
However, there were some glaring losers in February. Gap Stores, Limited Stores, Lane Bryant and J.C. Penney reported same-store sales declines. Other chains, including Dayton Hudson’s department stores, Claire’s and The Buckle also had lower same-store sales than a year earlier.
“Like January, February is a transitional month, characterized by small volumes and limited selling themes,” Pitt wrote in a research note. “Some retailers reported favorable take-up of early spring offerings and steady business over the month’s two main calendar events — Valentine’s Day and President’s Day.”
At Neiman Marcus Group, Bergdorf Goodman turned in a same-store sales jump in the high teens, and sales for NM Direct were up in the mid-single digits. Designer apparel, accessories, jewelry, shoes and men’s sportswear did best.
“February is a relatively slow month in terms of volume, but [the results] signal our customer’s excitement about spring and summer merchandise,” said a Neiman’s spokesman.
Saks Inc.’s high-single-digit jump was driven by sales of designer and “gold range,” apparel, which is priced between bridge and designer, as well as men’s apparel, outerwear, accessories, cosmetics, shoes, jewelry and intimate apparel. Weaker areas were moderate and better sportswear, day dresses and suits.
At J.C. Penney, men’s and children’s apparel sales were below plan, though jewelry, men’s suits and women’s shoes performed better, the company said. At Kohl’s, same-stores sales climbed 5.6 percent
Reporting monthly results for the first time, Nordstrom said, excluding the extra day in February caused by the leap year, its same-store sales climbed 3.1 percent. Leading categories for the Seattle-based chain were accessories, women’s designer apparel, men’s apparel, shoes and cosmetics. Women’s nondesigner apparel and juniors declined.
Wal-Mart said its core Wal-Mart Stores division saw strong sales of swimwear, intimates, jewelry, accessories and women’s plus sizes. Sam’s Club warehouse also had strong sales of women’s and men’s apparel, the company said.
Among the other national discounters, Target reported an 8.7 percent gain earlier this week and Kmart turned in 2.7 percent comp improvement.
It was a strong month for off-pricers like Dress Barn, Ross Stores and Value City, which all reported high-single-digit same-store sales improvements. Same-stores sales at TJX picked up 4 percent.
Comps at Limited’s apparel businesses, including Limited Stores, Express, Lane Bryant and Lerner New York, climbed 1 percent in February. Limited also owns 84 percent of Intimate Brands.
Limited Stores’ comps fell a less-than-expected 4 percent, and Lerner’s comps fell 4 percent, down from a 30 percent gain a year earlier.
Fueled by a 14 percent same-store gain at Victoria’s Secret Stores, Intimate Brands reported a 13 percent comp increase, about twice what analysts expected. Bra sales were driven by the new stretch lace Desire line and continued strength of the Body by Victoria collection.
Same-store sales for Bath & Body Works were up 11 percent, while merchandise margins were flat with last year, the company said.
Gap Inc’s 4 percent same-store sales gain was driven by improvements at Old Navy and Banana Republic. Gap Stores’ same-store sales were down in the low single digits. However, an emphasis on denim paid off, as prewashed denim jackets sold well. Embroidered items for girls and baseball-themed apparel for boys also sold well, the company said.
At Gap’s international operations, margins were lower as the division worked to clear inventory and suffered with weak sales in Europe, particularly the U.K.
Banana Republic’s same-store sales had a low, single-digit gain and margins were higher than last year. Sweaters, particularly twinsets, were popular, as were spring colors like guava and fuchsia, the company said.
Old Navy same-store sales were up in the high single digits, boosted in part by a successful Valentine’s Day promotion.
Several firms also said Thursday they changed their accounting, altering monthly figures, in response to the Securities & Exchange Commission requiring retailers to change how they report revenues related to layaway sales, sales returns and leased departments.

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