School bells aren't setting store cash registers ringing

September 03, 1995|By Alec Matthew Klein | Alec Matthew Klein,Sun Staff Writer

Those creatures -- elfin, peach-fuzzed and pre-pubescent -- are stampeding back to school, ringing up the cash register for this year's I-can't-be-seen-without-it:

"Scrunchies," aka head bands.

Knee-high boots.

Bell-bottoms and mood rings.

And, by the way, school supplies.

"I just look at kids and what they wear, and I honestly don't know what to make of it," professed 44-year-old William H. Carpenter Jr., father of two and president of Prime Retail Inc., a Baltimore-based operator of 16 manufacturer outlet shopping centers across the nation.

Retail analysts are still trying to figure it out, too, waiting for merchants' receipts to come in before declaring back-to-school sales a success, failure or wash. But early indications -- for what is perhaps the most important season for retailers other than Christmas time -- are less than promising.

Retailers across the board reported weak August sales at stores open at least a year, a widely recognized measure of performance:

Down 7 percent at fashion retailer Merry-Go-Round Enterprises Inc.

Down 0.4 percent at J. C. Penney Co.

Flat at May Department Stores Co., which operates Hecht's.

The Target discount chain was one of the few exceptions, reporting a 7.2 percent increase in comparable sales -- exceeding what the industry would have considered a respectable increase of 5 percent to 6 percent, even factoring in inflation at 3 percent.

"Sales have been quite weak throughout the spring and summer, and there is really no reason to expect that they will strengthen," said Charles W. McMillion, president of MBG Information Services, a Washington, D.C.-based business analysis and forecasting firm. "Wages are very weak and declining for many; consumer debt levels are very high; and consumer savings rates are very low, and there is job uncertainty, particularly in this region."

To illustrate the point: Baltimore has lost one-third of its retail employment over the past six years, Mr. McMillion said, declining from 28,900 jobs in January 1989 to 20,900 in January 1995. What's more, in June, the most recent month for which figures are available, sales taxes collected by the state grew only 1.1 percent compared with the same period last year, according to the Maryland comptroller's office. Apparel sales have been particularly anemic, dropping 10 percent in June, typically the state's second-biggest month for sales taxes after December.

All of which means that retailers are unlikely to repeat last year's success, when they poured $163.4 million into state coffers in August sales taxes, an 11 percent increase over 1993.

"You've got a lot of apparel retailers with their fingers crossed," said Tom Saquella, president of the Maryland Retail Merchants Association.

But some merchants reported encouraging increases in sales, ranging from 5 percent to 10 percent. And on a broader scale, there are other signs of consumer spending: American Express surveyed 1,000 parents and found they were spending an average of $325 on their children -- about 30 percent of which was paid with plastic.

Back-to-school sales -- swayed by teen-age angst and the lure of Hollywood promotion -- have come to mean much more than the mechanical tools of learning. There is, for example, the ever-important scholastic issue of what to wear.

The answer, according to The Gap at White Marsh Mall, is denim, anything in denim. "It's been flying out the door," said store manager Jeff Allen.

At the Pacific Edge shop in Marley Station Mall in Glen Burnie, there's been a consumer rush on "Rusty" surfer clothes and accessories and "No Fear" garb, including $16-to-$20 T-shirts carrying homilies such as "2nd place is the first loser."

But this year, the oddest hot-ticket item is perhaps the school uniform. Retailers like Wal-Mart, Dayton-Hudson and the Super tTC Kids shop at Westview Mall have capitalized on a growing school movement to offer voluntary dress codes.

The formal school attire is meant to eliminate peer pressure and, of course, to make money for merchants. But for the most part, retailers would be content with a break-even back-to-school season as word on the street suggests otherwise.

"What we're hearing is that it's not up to expectations -- put it that way," said Howard Eilenberg, an analyst with Johnson Redbook Service in New York. "What the stores are telling us is that the stationery and school supplies are selling OK but apparel is not, and that's following a trend that children's wear generally has not done well in department stores, in discount stores, even in chains. They've had a tough time for the last year, year and a half."

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