Many stores had terrific January Unsold Christmas goods fuel double-digit rise at apparel companies

February 07, 1997|By Liz Bowie | Liz Bowie,SUN STAFF

Retailers with the Christmas blues found plenty to celebrate in January as they racked up sales, some in the double digits, during a winter clearance buying spree by cost-conscious consumers.

The good monthly sales figures, released by most national retailers yesterday, proved once again that sales drive consumer spending these days.

"The consumer was waiting for a bargain and came out with a vengeance to buy it," said Alan Millstein of the Fashion Network Report, a retail industry trade publication.

J. C. Penney Co. Inc., one of the retailers at the top of the pack, posted a 13 percent increase for January at stores open at least a year -- a figure known as same-store sales. Those stores are considered the best measure of a retailer's strength because they do not reflect openings, closings and expansions.

Same-store sales at other apparel retailers included: Gap Inc., up 8 percent; Limited Inc., up 17 percent and Federated Department Stores Inc., up 9.4 percent.

The good sales were "heavily markdown driven" after a washout Christmas season, said Kurt Barnard of Barnard Retail Report in New York.

The positive results were inflated in part by comparisons with poor results for January 1996, when the East Coast was covered in snow that kept people inside and deflated sales, analysts said. For instance, Sears Roebuck and Co. saw a 0.6 percent increase in same-store sales in January 1996, and a 5.8 percent increase last January.

"For retailers who were living on Maalox in January [1996], they were popping the champagne corks this January," Millstein said. "Whether that will translate into profits is yet to be seen."

However, several analysts said they believe that profits may not have been squeezed too much by big markdowns. In many cases retailers were able to get rid of large leftover Christmas inventories that could have hurt the bottom line.

The strongest sales were in apparel stores and department stores, but high-end retailers, such as Saks Holdings Inc., which owns Saks Fifth Avenue, continued to do well. Saks' same-store sales for January were up 14 percent.

"The retailers of big-ticket durables did not participate in the party," said Kenneth Gassman, an analyst at Davenport & Co. in Richmond, Va.

In particular, the electronics industry, hurt by a lack of consumer interest in personal computers, saw sales continue in the negative double digits.

Best Buy Co. Inc. suffered a 15 percent decline in same-store sales, and Circuit City posted an 11 percent decline in January. ++ While most analysts believe Circuit City is still in good financial shape, others say that Best Buy is having trouble.

Hechinger Co., the home improvement retailer based in Largo, again reported same-store sales in the minus column -- a decrease of 6.2 percent in January. For the year, however, sales were down 3.3 percent.

Monthly retail sales

J.......................... Monthly ............... ... ....YTD

.................Monthly ...same-store .....YTD .... same-store

Company .........sales* ....pct. change ...sales* ..pct. change

Best Buy ..........$522 ...........-15% ...$7,245 ..........-5%

Circuit City ....$630.2 ...........-11% ...$6,500 ..........-9%

Dayton Hudson ...$1,486 ..........+5.5% ..$24,885 ........+2.5%

Gap ...............$288 ............+8% ...$5,284 ..........+5%

Hechinger .........$105 ..........-6.2% ...$2,200 ........-3.3%

J.C. Penney .....$1,699 ...........+13% ..$15,734 ........+3.4%

Kmart ...........$1,948 ............+8% ..$33,987 ........+2.6%

Limited .........$510.9 ...........+17% ...$8,645 ..........+3%

Lowe's ..........$428.6 ...........+13% ..$8,600* ......+6.5%**

May Dept. Stores $578.4 ..........+6.7% ..$11,650 ........+4.3%

Sears ...........$2,437 ..........+5.8% ..$37,858 ........+6.1%

Wal-Mart ........$7,021 ..........+6.6% ..$104,437 .......+4.6%

*In millions ...............** Estimated.

Pub Date: 2/07/97

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