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Upstairs Chains Outperform Discounters

Sales Notably Lackluster for Most Big Retailers as Holidays Approach

Sending out a signal that Santa may come late and leave early at this year's Christmas party, making for a sluggish and promotional retail selling season, October same-stores were muted or worse for most big retailers.

Indeed, with the exception of a small cadre of stores with predictably sturdy results, sales elsewhere were notably disappointing. Underlining the broad-based malaise at retail as fretful consumers held on to their wallets, a disconcertingly high number of the key retailers tracked each month by Home Textiles Today — 40%, or eight out of the 20 — recorded declines in same-store sales.

There were, to be sure, winners. Those who won, mostly won big, notably department stores and those selling a strong value proposition, like JCPenney, TJX and Kohl's. JCPenney came in first with a gain of 8.1%. Federated was not far behind at 7.7% despite persistent softness at its May division.

October's biggest loser — ditto the past several months — was Pier 1 Imports, where comps remained in freefall, dropping 13.7%. Nor were all department stores safe last month, with Bon-Ton dropping by 9.7% as it knits together a growing store base, and the on-and-off Dillard's falling by 5.0%.

While its comps were still trending up, another big loser, perhaps the biggest of them all simply because of its dominant position in world retailing, was Wal-Mart. With its low-income consumers under unrelenting pressure, same-store sales in its core U.S. Wal-Mart stores were little more than flat, edging up just 0.3%. Faring better was sibling Sam's warehouse clubs, with sales advancing 2.0%.

It will come as no surprise to textiles suppliers, who have been feeling the pain for a while, that several retailers complained about their home business during October. Bon-Ton said it "experienced weaker sales performance in soft home, cosmetics and dresses." Dollar General said gains in all other departments were offset by weakness in apparel and home products. Ditto Family Dollar, which said "sales of apparel and home products were weak." At Gottschalks, "our trend in the home division continued to perform below the same period last year," but that should change, said Jim Famalette, ceo, since "We have taken a more aggressive marketing approach for this division and expect sales to show improvement in the fourth quarter."

Same-store sales at two fabrics and crafts retailers, Hancock and Jo-Ann, remained weak, with Hancock noting that gains elsewhere "were more than offset by declines in the home decorating area."

Only one of the retailers tracked each month by HTT reported a positive trend in home: Ross Stores, where comps were lifted by "ongoing strength in the home and shoe businesses."

OCTOBER SALES FOR KEY RETAILERS
Four weeks ended Oct. 28a(dollar amounts in millions)

2006 sales 2005 sales Total % chg. Same-store % chg.
a. Reporting periods vary from store to store.
b. Includes results of acquired nameplates, including Bergner's, Boston Store, Carson Pirie Scott, Elder-Beerman, Herberger's and Younkers.
c. Total sales were reduced by the closing of 78 duplicate stores following the May Department Stores acquisition.
d. For the nine weeks year-to-date of the Costco fiscal year.
e. For the first nine weeks of the retailer's fiscal year.
f. Hancock total sales were reduced by the closing of 41 stores.
BJ's Wholesale Club $602.6 $588.1 2.5 (0.7)
The Bon-Ton Stores b $249.7 $94.7 163.7 (9.7)
Costco $4,590.0 $4,260.0 8.0 4.0
Dillard Dept. Stores $474.0 $488.3 (2.9) (5.0)
Dollar General $683.9 $639.8 6.9 1.9
Family Dollar $4,809.0 $4,515.0 6.5 1.0
Federated c $1,863.0 $2,023.0 (7.9) 7.7
Fred's $124.9 $120.4 3.7 (2.5)
Gottschalks $44.2 $44.0 0.5 1.4
Hancock Fabrics g $34.3 $37.0 (7.3) (1.4)
JCPenney $1,538.0 $1,404.0 9.5 NA
Dept. stores $1,928.0 $1,169.0 11.0 8.1
Catalog/e-commerce $240.0 $235.0 2.1 NA
Jo-Ann Stores $167.9 $174.6 (3.8) (6.4)
Kohl's Corp. $1,246.9 $1,119.6 11.4 4.2
Pier 1 Imports $114.1 $131.3 (13.1) (13.7)
Ross Stores $438.0 $402.0 9.0 3.0
Stein Mart $112.1 $112.8 (0.7) (2.2)
Target Corp. $4,054.0 $3,694.0 9.7 3.9
TJX Cos. $1,500.0 $1,300.0 10.0 5.0
Wal-Mart Stores Inc. $25,710.0 $23,024.0 11.7 0.5
Wal-Mart Stores $16,583.0 $15,397.0 7.7 0.3
Sam's Club $3,110.0 $2,073.0 1.2 2.0
39 WEEKS YEAR-TO-DATE
BJ's Wholesale Club 5,952.0 $5,673.0 4.9 1.3
The Bon-Ton Stores $2,112.7 $822.6 156.8 (1.0)
Costco d $10,150.0 $9,400.0 8.0 4.0
Dillard Dept. Stores $5,245.2 $5,221.9 0.4 0.4
Dollar General $6,600.0 $6,100.0 8.0 2.2
Family Dollar f $1,082.1 NA 7.2 1.6
Federated c $17,813.0 $12,819.0 39.0 3.5
Fred's $1,232.0 $1,133.0 8.7 2.1
Gottschalks $445.7 $447.1 (0.3) 0.1
Hancock Fabrics f $276.6 $285.0 (2.9) (0.7)
JCPenney $13,239.0 $12,578.0 5.3 NA
JCPenney stores $11,228.0 $10,645.0 5.5 4.4
Catalog/e-commerce $2,011.0 $1,933.0 4.0 NA
Jo-Ann Stores $1,250.0 $1,280.0 (2.3) (5.8)
Kohl's Corp. $10,113.4 $8,750.3 15.6 6.9
Pier 1 Imports e $12,400.0 $11,300.0 9.0 4.0
Ross Stores $3,962.0 $3,533.0 12.1 5.0
Stein Mart $1,040.3 $1,054.3 (1.3) (2.0)
Target Corp. $38,609.0 NA 11.3 4.8
TJX Cos. $12,400.0 $11,300.0 9.0 4.0
Wal-Mart Stores Inc. $247,882.0 $221,089.0 12.1 2.3
Wal-Mart stores $162,036.0 $149,557.0 8.3 2.2
Sam's Clubs $30,432.0 $29,087.0 4.6 2.9


Winners and Losers
Same-store sales % change

Winners
JC Penney 8.1
Federated 7.7
TJX 5.0
Kohl's 4.2
Costco 4.0
Losers
Pier 1 -13.7%
Bon-Ton -9.7
Dillard -5.0
Fred's -2.5
Stein Mart -2.2


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