Un-Seasonable Retail Climate
Jennifer Marks -- Home Textiles Today, November 3, 2008
What a week we just had.
Low-ender Value City washed out, joining Mervyns and Linens 'n Things on the roster of October liquidations. That's a total of 586 stores launching GOB sales in a span of about 19 days.
Off-pricer Tuesday Morning, which usually does well when the economy is tight, reported the rash of liquidations is hurting its business, with the impact of Linens 'n Things wind-down having a “prolonged” effect on its textiles business in particular.
Up-market Williams-Sonoma Inc. slashed full-year earnings expectations by 75%, saying October comps to date were running negative 26.6%. Whoever thought we'd see those kinds of numbers in the same sentence as Williams-Sonoma? Certainly not I.
Wal-Mart launched a new three-year plan, telling analysts, “This is Wal-Mart's time.” Having listened to hours of the Wal-Mart Inc. two-day analysts' conference, I can tell you the gang from Bentonville sounded mighty confident.
Target stakeholder Pershing Square Capital Management made a public pitch to persuade other Target investors to get behind Pershing's plan to separate the retailer from its real estate. At a time when markets are reeling from a glut of complicated financial instruments, will other shareholders embrace a formula so unusual that even Pershing acknowledged Target is one of only a handful of companies in the world to which it could be successfully applied?
Now that the Halloween candy has been relocated to the clearance bin, all eyes turn to the main holiday season. Everyone expects it to be pretty lame industry-wide. With credit-card companies tightening credit lines for consumers, the Wall Street Journal's report that layaway demand is spiking at TJX, Burlington Coat and Kmart came as no surprise. OK, there was one surprise: Who knew big-box chains still offered layaway? I thought everybody got out of that end of the business in the early '90s.
Perhaps layaway is one of those uncomplicated, old-fashioned financial instruments that can help coax the consumer forward for the next year or so. Might be worth a try.
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