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Home Strength Mixed in July

James Mammarella -- Home Textiles Today, August 13, 2007

Home furnishings departments showed mixed strength across the retail landscape in July, a month of uneven results among merchants.

JCPenney clearly drubbed its department store rivals, with a sales uptick of 13.3% to $1.4 billion for the four weeks ending Aug. 4 — and a comparable-store sales gain of 10.8%, beating all comers from every channel among the 17 chains tracked by Home Textiles Today.

JCPenney said it was happy with early back-to-school results, "as well as the positive customer response to recent promotional events in fine jewelry and home, including furniture."

Sales activity, sluggish in June, stepped up in July, with comps attaining a 2.8% gain by the 54 retailers indexed by the Johnson Redbook. JCPenney was one of three July double-digit comp gainers in the Redbook report; the other two were apparel retailers.

Among the HTT retailers, 11 recorded positive comps — but five of those were gains of 1.5% or less.

July was a story of haves and have-nots. The mid-tier and off-price chains did best; the department store operators — as in June — generally slumped.

Hurt most were Bon-Ton, with a comp drop of 7.6% — the same as the total decline of 7.6% to $194.3 million; and Dillards, where comps were off 6.0% for July, and down 4.0% year-to-date.

Bon-Ton management's assessment was blunt: "The weakest performing areas were home and furniture," said Tony Buccina, vice chairman and president-merchandising.

At Dillards, management cited cosmetics for better-than-average performance, and noted below-trend sales of juniors' and kids' apparel — but said nothing at all about home categories.

Meanwhile on the mass-merchandising front, Target differentiated itself from Wal-Mart, even as the world's biggest discounter launched its 16,000-product price-slashing campaign. The upscale discounter scored a 6.1% comp gain, vs. a languid 1.3% comp gain at U.S. Wal-Mart stores and supercenters.

While Wal-Mart said it did well in perishables, pharmacy, and electronics, it declared that "apparel and home overall continued to be soft and are expected to remain so through the third quarter."

Kohl's, with flat comps following June's 4.5% comp fall, had nothing particular to say about home, although chairman and ceo Larry Montgomery said he was pleased with early back-to-school indications, and announced, "We continue to experience strong gross margin performance" and made no changes to its second quarter earnings plan.

Macy's continued a sluggish season with comps down 1.4% following a June 2.7% drop; the company kept expectations dampened, saying it "expects same-store sales in August to be in the range of down 1% to up 2%."

Winners and Losers
Same-store sales % change

Winners
JCPenney 10.8
Costco 7.0
Target 6.1
Duckwall-ALCO 5.2
TJX Cos. 5.0
Sam's Club 4.9
Losers
Bon Ton -7.6
Dillard's -6.0
Gottschalks -3.9
Stein Mart -3.4
Macy's -1.4


July Sales for Key Retailers
Four weeks ended August 4a(dollar amounts in millions)

2007 sales 2006 sales Total % chg. Same-store % chg.
a. Reporting periods vary from store to store.
b. Bon-Ton: Total and same-store sales for Bon-Ton and Carson's combined for July, but not meaningful for 26-week period.
c. Costco: July, four weeks ended Aug. 5; year-to-date, 49-week period.
d. Duckwall-ALCO: period ended July 29.
e. Family Dollar: 49 weeks year-to-date.
f. Wal-Mart: period ended Aug. 3.
BJ's Wholesale Club $650.5 $613.9 6.0 1.5
The Bon-Ton Stores b $194.3 $210.3 (7.6) (7.6)
Costco c $5,020.0 $4,530.0 11.0 7.0
Dillard Dept. Stores $500.3 $527.6 (5.0) (6.0)
Duckwall-ALCO d $35.3 $33.1 6.9 5.2
Family Dollar $491.7 $475.9 3.3 0.5
Fred's $126.5 $119.2 6.0 0.5
Gottschalks $41.0 $43.4 (5.5) (3.9)
J.C. Penney $1,404.0 $1,239.0 13.3 NA
Dept. stores $1,201.0 $1,057.0 13.6 10.8
Catalog/e-commerce $203.0 $182.0 11.5 NA
Kohl's Corp. $1,052.1 $977.0 7.7 0.0
Macy's $1,602.0 $1,605.0 (0.2) (1.4)
Ross Stores $450.0 $414.0 9.0 1.0
Stein Mart $84.5 $82.8 2.0 (3.4)
Target Corp. $4,363.0 $3,937.0 10.8 6.1
TJX Cos. $1,300.0 $1,200.0 8.0 5.0
Wal-Mart Stores Inc. f $26,999.0 $25,346.0 6.5 1.9
Wal-Mart Stores $16,988.0 $16,462.0 3.2 1.3
Sam's Club $3,284.0 $3,078.0 6.7 4.9
International $6,727.0 $5,806.0 15.9 NA
26 WEEKS YEAR-TO-DATEa
BJ's Wholesale Club $4,259.3 $3,965.1 7.4 3.0
The Bon-Ton Stores b $1,446.2 $1,308.5 10.5 NA
Costco c $59,330.0 $54,410.0 9.0 6.0
Dillard Dept. Stores $3,412.1 $3,521.7 (3.0) (4.0)
Duckwall-ALCO d $124.4 $119.6 4.0 2.1
Family Dollar e $6,339.9 $6,043.8 4.9 0.9
Fred's $866.9 $823.8 5.0 1.3
Gottschalks $286.8 $296.9 (3.4) (2.4)
JCPenney $8,741.0 $8,458.0 3.3 NA
JCPenney stores $7,488.0 $7,166.0 4.5 2.1
Catalog/e-commerce $1, 253.0 $1,292.0 (3.0) NA
Kohl's Corp. $7,161.3 $6,497.8 10.2 2.5
Macy's $11,815.0 $11,925.0 (0.9) (1.0)
Ross Stores $2,885.0 $2,627.0 9.0 1.0
Stein Mart $706.9 $701.1 0.8 (1.6)
Target Corp. $27,790.0 $25,449.0 9.2 4.6
TJX Cos. $8,500.0 $7,900.0 8.0 NA
Wal-Mart Stores Inc. f $178,685.0 $165,390.0 8.0 1.3
Wal-Mart stores $114,560.0 $108,615.0 5.5 0.6
Sam's Clubs $21,834.0 $20,382.0 7.1 5.3
International $42,291.0 $36,393.0 16.2 NA


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