Stores report healthy increases in August sales Some see trend as sign of holiday profits ahead

Retailing

September 05, 1997|By Liz Bowie | Liz Bowie,SUN STAFF

Retailers reported some of the best monthly sales of the year in August, exceeding expectations and making them dare to dream of a profitable December holiday season.

Clothes sold well, particularly in discount stores, and department stores of all varieties reported same-store sales increases better than in the spring and winter.

"This is probably the best news for the year for retailers," said Alan Millstein at the Fashion News Network, a trade publication in New York. "Consumers are back in the malls and shopping."

The discounters had healthy increases in same-store sales, the percentage increase or decrease in sales at stores open at least a year when compared to the year before.

Wal-Mart Stores Inc. was up 7.1 percent for the month, Kohl's Corp. reported an increase of 17.5 percent and Kmart Corp. said same-store sales rose 6.4 percent.

Department stores' increases were slightly less. Dayton Hudson Corp., parent of Target and Mervyn's, increased 6.1 percent, and May Department stores, parent of the Hecht Co., was up 6.3 percent.

Millstein said the relatively cool weather in August helped get people into stores and buying fall clothes. Stores should get another boost this week in the mid-Atlantic as the temperatures dip into the 50s at night. "It puts you in the mood to go into a store and put something woolly on," Millstein said.

But some analysts cautioned that perhaps the results were not as rosy as they first appeared. Mark Millman, president of Millman Search Group, a Baltimore County firm that places retail executives nationwide, said retailers had discounted merchandise to make it sell, and suggested that margins may have suffered.

"What the retailers are doing is keeping the customers involved so they can keep them coming back through the Christmas season," Millman said.

Research indicates that consumers tend to shop the same stores at Christmas that they went to for back-to-school merchandise.

The upward trend appeared to touch nearly all types of retailers, including electronics and computer retailers, which have been in the doldrums. Tandy Corp., for instance, reported a 6 percent increase in sales at its Computer City stores in August.

Lowe's Cos. Inc. said August sales rose 4 percent. Rite Aid Corp. reported a 9.8 percent increase.

Biggest winners of the month were Pier 1 imports with a 20.6 percent increase and the Men's Warehouse with 10.2 percent.

Same-store sales are considered a key indicator of the financial health of a retailer because they factor out store openings and closings.

'

Monthly retail sales

.. .. . .. .. .. .. .. .. ... Monthly .. .. .. .. . .. .. YTD

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

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

Dayton Hudson .. .. $2,119 .. .. .. +6.1% .. . $13,995 .. .. .. +3.9%

Gap . . .. .. .. .. . $597 .. .. ... +16% .. .. $3,173 .. .. .. +3%

J.C. Penney . .. .. $1,330 .. .. .. . -1% .. .. $8,083 .. .. .. +2%

Kmart . .. .. .. .. $2,338 .. .. .. +6.4% .. . $17,447 .. .. .. +5.7%

Kohl's Corp. ... .. . $255 .. .. . +17.5% .. .. $1,479 .. .. .. +11.3%

Limited .. .. .. .. . $683 .. .. .. . +5% .. .. $4,533 .. .. .. -1%

Lowe's ... .. .. .. $773.6 .. .. .. . +4% .. .. $5,982 .. .. .. +5%

May Dept. Stores .. . $929 .. .. .. +6.3% .. .. $6,172 .. .. .. +3.8%

Sears . .. .. .. .. $3,079 .. .. .. +2.8% .. . $21,717 .. .. .. +2.2%

Wal-Mart . .. .. .. $8,830 .. .. .. +7.1% .. . $63,042 .. .. .. +6.2%

* In millions

Pub Date: 9/05/97

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