Chains see same-store sales rebound slightly
February 12, 2001,
NEW YORK -The major U.S. retail chains in January were able to wash off some of the red ink that covered them in December.
Seven of the chains posted same-store sales gains of 5 percent or better in January, as opposed to just one in December (5 percent or better is considered healthy for a one-month increase). Eight chains saw comp-store sales drop last month, compared with 12 in the previous month.
The pack leaders include Sam's Club, which topped the entire list and the discount channel with a 9.9 percent same-store pickup. In doing so, the chain more than doubled the performance of its warehouse club competitor, Costco, which finished the first month of the year with a 4 percent same-store increase.
Its close relative, Wal-Mart stores, ticked its comp-store performance up 5 percent. Kmart scored a rare victory over the Target mass-merchant chain in January, with its 4.3 percent same-store increase outpacing Target's 3.5 percent.
In the department-store channel, Gottschalks and Kohl's finished first and second with comp-store gains of 7.8 percent and 7.1 percent, respectively.
Jim Famalette, Gottschalks' chairman and ceo, said, "Women's apparel, intimate apparel and shoes were the top performing merchandise categories last month, as well as housewares, textiles and furniture in our home division.''
Federated and May Co. posted fair same-store sales. Each department-store chain reported identical 3.4 percent pickups for stores open for one year or more.
The top of January's red chart was occupied by Ames, whose same-store sales fell 8 percent. The company's president and ceo, Joseph Ettore, commented that this was "slightly below plan," and added that Ames' 18 percent inventory reduction "mirrors the current economic environment and reduced our sales this month, since January sales for most retailers are driven by clearance and markdowns from excess holiday inventories."
Two midrange department-store chains, JCPenney and Mervyns, finished second and third on the down side. JCPenney posted a 6.6 percent drop in same-store results last month, while Mervyn's saw its comp number decline 3.6 percent.
After the awful 2000 holidays, these results were considered almost a "recovery" by retail industry analysts. Steve Paspal, retail analyst with John Hancock Funds, said, "Granted, the weather cooperated and retailers used plenty of promotions to clear the shelves of winter merchandise, but I think the important point is that January demonstrates consumers will spend if the conditions are right."
Still, the overall economic picture for the consuming public remains murky down the road. On the same day last week in which the chains reported their January results, the U.S. Department of Labor also broke the news of an increase of 15,000 in the number of unemployment claims filed by workers.
In the retailing world specifically, January was marked by the announcement that Federated was closing its Stern's division.
Michael Niemira, vp of Bank of Tokyo-Mitsubishi, said, "Nobody should think that things will improve. Consumers may have the willingness to spend, but they don't have the ability."