Middle-Market Blues in July
August 11, 2008,
New York — Evidence mounted that consumers are focused on the necessities — meaning that back-to-school shopping for fashion goods will be sluggish — as retailers dependent upon softlines suffered while commodity-based merchants thrived in July.
The main glimmer of optimism among the struggling chains in the middle was the common refrain that inventories have been strictly managed.
JCPenney, which posted a 6.5% comp decline (against a very strong 12.0% comp gain in July '07), stated that it is focused "on effectively managing its inventory position, and, as previously forecasted, ended the July period with comparable store inventories below 2007 levels."
Indeed, JCP announced, "Due to better than expected sell-through of promotionally priced merchandise and continued expense management measures taken over the course of the quarter as part of the company's Bridge Plan, JCPenney now expects second-quarter earnings to be in the range of 50 cents to 52 cents per share. The company's previous guidance was for second-quarter earnings to be approximately 38 cents per share."
"July was a month driven by clearance sales of spring and summer merchandis," said Larry Montgomery, chairman and ceo of 957-store Kohl's, where July comps fell a sharp 10.4%. "Our inventory levels in these clearance and transitional categories were significantly lower than last year, affecting sales results, but leading to improved gross margins.We enter the fall season well-positioned and able to react quickly to any improvement in sales trends," he said.
"Our inventory is fresher with less clearance than the prior year," said Tony Buccina, vice chairman and president of merchandising, of 280-store Bon-Ton. "On a comparable store basis, inventory was down approximately 9%."
"Although comparable-store sales in home and apparel were slightly negative during the period," stated Wal-Mart, "the stores had much cleaner inventory in these areas and therefore, much less clearance than in the same period last year."
Nearly every merchandiser reported dragging sales volume in soft home categories, a situation that has become the norm.
The warehouse club sector was far and away the winner among the 40-retailer Johnson Redbook Same Store Sales Index (SSI) in July, which overall posted a 2.1% gain, following the 3.7% rise in June. While flattening, the gain did represent the fourth consecutive month of upticks for the Index.
|2008 sales||2007 sales||Total % chg.||Same-store % chg.|
|a. Reporting periods vary from chain to chain.
b. Costco: 4 weeks and 48 weeks ended August 3.
c. Duckwall-ALCO: 4 weeks and 26 weeks ended August 3.
d. JCPenney: comps for stores only; no longer breaks out direct-to-consumer sales.
e. Wal-Mart: 4 weeks and 26 weeks ended August 1; Int'l not included in comps.
f. Family Dollar: 48 weeks.
|The Bon-Ton Stores||$197.9||$194.3||1.8||0.7|
|Dillard Dept. Stores||$513.8||$500.3||3.0||2.0|
|J.C. Penney d||$1,336.0||$1,405.0||(4.9)||(6.5)|
|Wal-Mart Stores Inc. e||$30,159.0||$27,579.0||9.4||3.7|
|The Bon-Ton Stores||$1,373.6||$1,446.2||(5.0)||(5.1)|
|Dillard Dept. Stores||$3,287.0||$3,412.1||(4.0)||(5.0)|
|Family Dollar f||$6,459.9||$6,339.9||1.9||1.0|
|Wal-Mart Stores Inc. e||$196,476.0||$179,265.0||9.6||3.7|
Related Content By Author
1200 Suppliers are Ready for You at Intertextile Shanghai
Home & Textiles Today eDaily
Most Viewed Articles
See the August 2017 issue of Home & Textiles Today. In this issue, we look at the Top 50 Retailing Giants Report, plus Manufacturing: Made in the USA gaining ground; International: Portugal ramping up exports; New products: NY Now home textiles introductions; Outlook: Commentary from H&TT's editors; and Planning: Trade show calendar.