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Home Textiles Sag in March Comp Gains

Heath E. Combs, James Mammarella -- Home Textiles Today, April 23, 2007

Leading retailers of home textiles reported fair to stellar gains in comparative-store sales for March — but the home textiles component was a consistently weak contributor across all channels, except the off-price chains.

The month was a positive one for nearly every retailer tracked each month by Home Textiles Today, as the shift of Easter from April in 2006 to March this year created a built-in upswing. Indeed, many merchandisers prudently dampened expectations for April. For example at one high-flier, Target, chairman and ceo Robert Ulrich projected a comp dip of 2% to 4% in April would follow the impressive 12.0% rise in March — for a combined March-April same-store sales gain of 4% to 6%.

The most impressive winners for the month were the smack-in-the-middle types: Kohl's, Target, and JCPenney. These retailers continue to execute smartly, presenting shoppers a superior style-value offer as well as hip, powerful marketing messages.

It was no accident that these three chains happened to be the only retailers with significant home departments to make a list of 15 double-digit gainers in the Johnson Redbook Flash Report for March — the other 12 are almost entirely apparel-focused. Overall, Redbook's 58-company same-store sales index was up 6.2% for the month.

But HTT's roundup showed that home departments missed out on the party.

Wal-Mart comps rose 4.0% overall, composed of a 3.4% rise at Wal-Mart stores and a 7.4% gain at Sam's Club. The company said, "Sales in the home and apparel areas continue to be soft, as expected."

At neighborhood discounter Family Dollar, where comps rose 5.8%, the company said sales were "strongest in toys, food and apparel; sales of home products were soft."

Comps at Federated edged up 2.3%, lagging previous guidance of a 2.5% to 4.0% gain. Terry Lundgren, chairman, president and ceo, said cold weather hindered apparel sales. He also pointed out, "March sales fell just short of our expectations in most regions across the country, largely attributable to weakness in home-related merchandise categories."

JCPenney saw comps rise 10.6%, and noted "strength in apparel categories, which benefited from an earlier Easter, while home continued to experience some weakness."

Spring apparel led the way at Kohl's, where comps zoomed up 16.8%, prompting chairman and ceo Larry Montgomery to announce, "We now expect to achieve approximately a 5% comparable sales increase for the first quarter versus our earlier expectations of a 2%-4% comparable sales increase."

Dillards comps rose 6.0%, with the company noting that, in contrast to strong performance in juniors and children's apparel, "sales of home and other merchandise were significantly below trend."

Comps at The Bon-Ton Stores inched up 0.6%, with its Carson's acquisition outperforming the heritage Bon-Ton chain. Carson's comps rose 2.8% while Bon-Ton's dove 3.8%. "Our poorest performing businesses were home and furniture," noted Anthony Buccina, vice chairman and president-merchandising.

Home shared top billing at Ross Stores, where comps rose 6%. Michael Balmuth, vice chairman, president and ceo, commented, "Shoes, home and ladies were the best performing merchandise categories."

TJX Companies saw a 6% increase in comps; president and ceo Carol Meyrowitz indicated, "Virtually all of our divisions achieved above-plan comparable store sales increases."

WINNERS AND LOSERS
Same-store sales % change

Winners
Kohl's 16.8%
Target 12.0
JCPenney (stores) 10.6
Stein Mart 8.0
Sam's Club 7.4
Gottschalks 6.4
Costco 6.0
Dillards 6.0
Ross Stores 6.0
TJX Cos. 6.0
Losers
No retailer listed posted a negative same-store sales change for the reporting period.


MARCH SALES FOR KEY RETAILERS
Five weeks ended April 7 (dollar amounts in millions)

2007 sales 2006 sales Total % chg. Same-store % chg.
a. Generally a 9-week period; reporting periods vary from company to company.
b. Bon-Ton: total sales include Carson's, same-store sales do not.
c. Starting in Feb. 2007, Federated total and same-store results now include all former May Co. stores.
d. Costco: 32 weeks ended April 8
e.Family Dollar: 19 weeks ended April 7
BJ's Wholesale Club $790.8 $718.7 10.0 5.5
The Bon-Ton Stores b $288.0 $244.0 18.1 0.6
Costco $5,940.0 $5,370.0 11.0 6.0
Dillard Dept. Stores $679.6 $631.9 8.0 6.0
Dollar General $904.8 $832.7 8.7 5.5
Family Dollar $651.4 $594.3 9.6 5.8
Federated c $2,288.0 $2,255.0 1.5 2.3
Fred's $172.2 $158.2 9.0 4.4
Gottschalks $58.9 $56.0 5.3 6.4
JCPenney $1,714.0 $1,548.0 10.7 N.A
Dept. stores $1,443.0 $1,274.0 13.3 10.6
Catalog/e-commerce $271.0 $274.0 (1.1) N.A
Kohl's Corp. $1,547.7 $1,233.8 25.4 16.8
Ross Stores $599.0 $526.0 14.0 6.0
Stein Mart $162.5 $143.7 13.1 8.0
Target Corp. $5,592.0 $4,789.0 16.8 12.0
TJX Cos. $1,700.0 $1,500.0 11.0 6.0
Wal-Mart Stores Inc. $34,255.0 $30,675.0 11.7 4.0
Wal-Mart Stores $22,116.0 $20,170.0 9.6 3.4
Sam's Club $4,156.0 $3,816.0 8.9 7.4
International $7,983.0 $6,689.0 19.3 N.A
9 WEEKS YEAR-TO-DATEa
BJ's Wholesale Club $1,393.0 $1,280.0 8.8 4.4
The Bon-Ton Stores b $525.6 $316.2 66.3 4.2
Costco d $38,110.0 $35,020.0 9.0 5.0
Dillard Dept. Stores $1,272.8 $1,275.5 0.0 1.0
Dollar General $1,600.0 $1,480.0 8.3 5.2
Family Dollar e $4,199.1 $3,955.6 5.8 1.4
Federated c $4,089.0 $4,055.0 0.8 1.8
Fred's $316.1 $291.0 9.0 4.1
Gottschalks $101.5 $100.3 1.3 1.9
JCPenney $3,029.0 $2,851.0 6.2 N.A
Dept. stores $2,554.0 $2,367.0 7.9 5.7
Catalog/e-commerce $475.0 $484.0 (1.9) N.A
Kohl's Corp. $2,477.0 $2,057.5 20.4 11.8
Ross Stores $994.0 $894.0 11.0 4.0
Stein Mart $266.8 $240.9 10.8 3.9
Target Corp. $9,720.0 $8,349.5 14.1 9.2
TJX Cos. $2,900.0 $2,600.0 9.0 5.0
Wal-Mart Stores Inc. $61,049.0 $55,452.0 10.1 2.6
Wal-Mart stores $39,689.0 $36,808.0 7.8 2.1
Sam's Clubs $7,315.0 $6,848.0 6.8 5.7
International $14,045.0 $11,796.0 19.1 N.A


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