February 06, 1998|By Lorraine Mirabella | Lorraine Mirabella,SUN STAFF
Mild weather and deep discounts on end-of-year merchandise lured consumers into the nation's stores in January, where shoppers gave retail sales a healthy boost and helped pull apparel sales out of a slump.
After a disappointing Christmas, apparel retailers saw monthly sales climb into the 10 percent range.
"Apparel has been weak up to this point, and there was no reason for apparel to show any strength, but merchants slashed prices and consumers came out of the woodwork," said Kenneth Gassman, a retail analyst with Davenport & Co. in Richmond, Va.
The trend toward shopping either upscale or at mass discounters continued as well, while department stores took a hit with only marginal sales increases.
Retailers' sales at stores open at least a year rose an average 4.89 percent, according to the Bloomberg same-store sales index, based on 24 retailers that reported sales yesterday. The ,, index rose 2.41 percent for department stores, 5.84 percent for discount stores and 4.96 for specialty/apparel stores.
Talbots Inc. led gains for specialty clothing stores, reporting same store sales of 20 percent. The retailer credited earlier and heavier price markdowns and the inclusion of spring merchandise in its regular semiannual sale.
"They were chopping prices, and price is king with the customer," Gassman said.
Sales rose 6 percent at Limited Inc. and 13 percent at Gap Inc.
Discounters also fared well, with sales up 7.6 percent at Wal-Mart Stores Inc., 11.6 percent at Value City Department Stores Inc. and 4 percent at Kmart Corp., which reported strength in jewelry, home fashions, cosmetics and books.
The month's showing impressed analysts by beating an especially strong January 1997. Results also supported analysts' theory that the annual holiday shopping rush has become more diluted, spreading into the "shoulder season" of September, October and January.
But analysts warned that a single month's results should not be given too much weight -- especially the final month of the fiscal year for most retailers.
"January is not a particularly important month," said Sally Wallick, a retail analyst with Legg Mason Wood Walker Inc. "The volumes are pretty low compared to December. It's a clearance month, with [retailers] just beginning to bring spring in."
Department stores as a group posted the weakest results, with sales up moderately but below industry averages. Federated Department Stores Inc., which operates Bloomingdales, Macy's and other chains, posted an increase of 1.5 percent in January. Sales rose 2.7 percent at the May Department Stores Co., which operates Hecht's and Lord & Taylor.
Department stores' poor showings can be explained in part by noting that many posted strong sales in January 1997, the period against which the new results are being compared, analysts said.
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Monthly retail sales
Company.. .. .. .. ..Monthly.. .. .. .. .. ..Monthly
.. .. .. .. .. .. ...sales*.. .. .. .. .. .. same-store
.. .. .. .. .. .. .. .. .. .. .. .. .. .. ...pct. change
Circuit City .. .. ..$807.1 .. .. .. ... ... .. .. .. .8
Dayton Hudson .. .. .$1,614 .. .. .. .. .. .. .. .. .4.6
Gap .. .. .. .. .. .. .$384 .. .. .. .. .. .. .. .. ..13
J.C. Penney .. .. .. ..$795 .. .. .. .. .. .. .. ...-5.4
Kmart .. .. .. .. ...$1,825 .. .. .. .. .. .. .. .. ...4
Kohl's Corp. .. .. ..$146.1 .. .. .. .. .. .. .. ...10.3
Limited .. .. .. .. .$549.3 .. .. .. .. .. .. .. .. ...6
Lowe's .. .. .. .. ..$637.9 .. .. .. .. .. .. .. .. ...5
May Dept. Stores .. .$593.8 .. .. .. .. .. .. .. .. .2.7
Sears .. .. .. .. ...$1,790 .. .. .. .. .. .. .. .. .5.4
JTC Wal-Mart .. .. .. ...$8,066 .. .. .. .. .. .. .. .. .7.6
* In millions
Pub Date: 2/06/98
