Sales gains modest for retailers Department-store chains slipped after months of increases

Upscale shops also fell

March results pale in comparison to high marks of year ago

April 11, 1997|By Liz Bowie | Liz Bowie,Sun Staff

Despite an early Easter weekend that fell in March, most retailers saw only modest sales gains for the month, results that analysts said will force major sales soon.

"The mall-based retailers had a disastrous month," said Alan Millstein, editor of Fashion Network Report, a retail industry trade publication. "It was the souffle that never rose."

The department-store chains, which had seen respectable gains for several months, were particularly hurt. Same-store sales at May Department Stores were flat and rose only 1.9 percent at Dayton Hudson from the same period the year before. J.C. Penney, which just two months ago reported a 13 percent increase in same-store sales, reported a 3.7 percent decrease last month, and Federated Department Stores Inc. saw a 0.2 percent decline.

Same-store sales are considered a key indicator of the health of a retailer because they filter out results from new store openings and closings.

Upscale retailers, which had been seeing some double-digit increases in same-store sales, also saw significant declines in the month of March. Stores such as Saks Holdings Inc., which owns Saks Fifth Avenue, reported a 1.5 percent increase in same-store sales.

Analysts said that they do not think dips in the stock market were the reason for the less-than-hot sales at the upscale stores.

"Nothing is forever and luxury goods were so hot, it sort of had to cool down," said Howard Davidowitz at Davidowitz & Associates, a national retail consulting firm.

Many department and upscale stores were also trying to measure up to some very strong increases from March of 1996, when consumers went on a spring buying spree. "Last March the market was going crazy. It was on a 45-degree angle and people were just going crazy," Davidowitz said.

Davidowitz sees March results as a mixed lot rather than a disappointment for everyone. "If you take the largest retailers in the U.S., the performance isn't so bad," he said.

Wal-Mart Stores Inc. was up 7.2 percent, Kmart Corp. reported a 13 percent increase and Sears, Roebuck and Co. saw a 1 percent increase.

Home improvement stores traditionally do their best business in the spring and Lowe's reported a huge 14 percent increase in same-store sales. Hechinger Co., based in Largo, said its sales were $197.7 million, down 4.1 percent from $206.3 million from March the year before. Same-store sales were down 4.4 percent.

"It is nail-biting time for the retailers," said Millstein, who believes desperation sales will follow during May and June. He blames the lackluster results for the month on cool weather, which made people complacent about buying spring clothing, and accumulated debt by middle-income Americans.

But he also said nothing is compelling consumers to walk into the stores. "There isn't great innovation in design for the spring."

Best Buy, which has reported several months of decreasing same-store sales, said yesterday it has stopped reporting monthly sales figures. Sales will be reported quarterly.

Monthly retail sales

I?............... ................Monthly ........... .......YTD

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

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

Circuit City** ....$590.6 .....-1% .......... ................

Dayton Hudson .....$2,312 ....1.9% .....$3,970 ...........2.9%

The Gap .............$524 .....-3% .......$828 ............-2%

Hechinger .........$197.7 ...-4.4% .....$321.6 ..........-5.1%

J.C. Penney .......$2,543 ...-3.7% .....$2,256 ...........2.2%

Kmart .............$2,921 .....13% .....$4,995 ...........9.1%

The Limited .......$719.1 .....-6% .....$1.289 .............4%

Lowe's ............$974.6 .....14% .....$1.559 ............11%

May Dept. Stores ..$1,010 ....0.0% .....$1,750 ...........1.3%

Sears ..............$2,54 ......1% .....$6,088 ...........1.3%

Wal-Mart .........$10,287 ....7.2% ....$17,979 .............7%

*In millions

Circuit City is not reporting year to date because the first month of its fiscal year began in March.

Pub Date: 4/11/97

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