Friday, May 10, 2002

Weather cooled buying urge

Clothing sales disappoint

By Anne D'Innocenzio
The Associated Press

        NEW YORK — Unseasonably cool weather and Easter in March dampened retail sales in April for many merchants, including industry leader Wal-Mart Stores Inc. and Target Corp.

        Still, in what is becoming a monthly tradition, Wal-Mart, along with other discounters and several moderate-priced powerhouses such as Kohl's Corp. and TJX Cos., continued to outperform the industry. Department stores, with a few notable exceptions like J.C. Penney Co. Inc., continued to languish, though their businesses appear to be stabilizing.

    April same-store sales reported by the five largest retailers (sales compare the current year's sales with those of the previous year at stores open at least a year):
    • Wal-Mart Stores, up 3.3 percent.
    • Target, up 0.4 percent.
    • Kmart, filed for Chapter 11 in January and reports its same-store sales data when itreports its operating data at the end of each month.
    • J.C. Penney, up 5.5 percent (J.C. Penney stores only).
    • Sears, Roebuck and Co., down 2.8 percent (domestic stores only).
        Many mall-based apparel chains took a big hit, hurt by the damp and cold weather that stymied consumer demand for shorts and peasant tops.

        Cincinnati-based Federated Department Stores Inc. said same-store sales declined 5.9 percent; total sales were down 5.6 percent.

        “Cooler weather in the last week hurt our apparel business, but in spite of that, same-store sales for the quarter were within the range of our expectations,” chairman and chief executive James Zimmerman said.

        Total sales at Dayton-based Elder-Beerman Stores Corp. were up both for April and for the first quarter of 2002. Elder-Beerman said April sales were $46.2 million, up 1.4 percent from April 2001. Same-store sales were down 2.5 percent compared to the same month last year, however.

        For the quarter, the retailer with 67 stores (including sites in Forest Park, Hamilton and Middletown) said sales were $141.2 million, up 1.2 percent from the first quarter of 2001. Same-stores sales were down 2.8 percent.

        Gap Inc. stumbled again, though not as badly as Wall Street expected. Same-store sales plummeted 24 percent, while total sales declined 17 percent.

        Whether April's lackluster performance marks a significant change in consumer spending from the rebound the industry saw from January through March remains to be seen.

        Carl Steidtmann, chief economist at Deloitte Research, said April's setback is a sign that the improving retail picture won't last, as the slew of incentives to spend — mortgage refinancing boom and tax rebates — starts to fade.

        “I think consumer spending will be difficult through back to school,” Mr. Steidtmann said.

        The Bank of Tokyo-Mitsubishi Ltd.'s preliminary tally of 65 chains, measuring sales at stores open at least a year, known as same-store sales, was up only 1.6 percent for April. That is about half of its original forecast for a 3.5 percent gain.

        Same-store sales are the best indicator of a retailer's health because they measure sales at stores open at least a year on a April-to-April basis.


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