A blow to the middle in December sales
January 10, 2008,
New York – While some merchants – notably the warehouse clubs, off-price chains and slow-but-steady Wal-Mart – posted fair to good comparative store sales gains for December, the bad news hit home hard in the middle market.
Not even Target escaped, posting a 5.0% comp decline. While chairman and ceo Bob Ulrich -- who yesterday announced his plan to hand over the ceo title to president Gregg Steinhafel on May 1 – noted that, “December sales were in line with the mid-month update provided on December 24," nevertheless he pointed out: "As a result, we continue to believe that fourth-quarter earnings per share will not meet last year's performance."
JCPenney, where December comps fell 7.5%, said, “The best performing merchandise categories in December were seasonal gift items across all divisions, housewares in the home division, family shoes and women's apparel,” just the latest occasion when the 1,067-store retailer demurred from mentioning home textiles specifically – but did say its weakest areas were “fine jewelry and big-ticket home categories.”
At 929-door Kohl’s comps dropped 11.4% and chairman and ceo Larry Montgomery felt compelled to say that customers’ bargain-hunting resulted in “deeper discounts, affecting our gross margin.” Kohl’s said its best-performing categories for the year remain footwear, accessories and men’s apparel.
Macy’s comps fell 7.9% and the 850-store company said it “expects January same-store sales to be down by 4% to 6% compared with last year.”
“Our weakest performing categories were juniors and soft home,” said Tony Buccina, vice chairman and president-merchandising at 280-unit Bon-Ton Stores. The comp story at Bon-Ton: a drop of 11.3%.
Even at Sam’s Club, which posted a 3.4% comp gain, the warehouse club remarked: “Home furnishing related items did not meet expectations.”
Regardless of the year-to-year shift in the Thanksgiving holiday out of the December retail month, and the three-days-fewer holiday shopping window, regardless of the weather and the weak dollar and expensive oil, the news seems to be that home textiles are not exactly, as merchants sometimes like to say, “blowing out of the stores.”
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