On and Off Message

The industry is very fortunate that most consumers don’t watch CNBC. The media mavens have spent the month of August painting a picture of doom and gloom based upon the sub-prime crisis, the mortgage melt-down and the global credit crunch. All major issues if you’re a banker, but not too important for most consumers. The comp-store sales numbers for the month generally indicate that the growing job market and the related increased household income have provided retailers with consumers ready to shop and spend.

Recently, I had the opportunity to spend a day walking stores and studying a number of retail concepts. As my tour ended, the old song “Looking For Love In All The Wrong Places” popped into my mind. It was obvious that J.C. Penney, Kohl’s, Chico’s, Gap and Wal-Mart have lost sight of their core customers’ taste level. They are now chasing the fashion point of view of other retailers, rather than trying to better serve the customers they have. By contrast, Target, American Eagle, Jos. A. Bank, Saks, Nordstrom and Zumiez are crystal clear about the customers they are trying to serve and are executing extremely well. We are once again reminded the price retailers pay for straying from serving their core customers.

If you don’t agree with my assessment, take a look at August’s comp-store results and the 90-day trend for each of these retailers in the tables. Consumers are voting at the cash register. To view the entire Retail Trending Report, go to www.gordmangroup.com.

For September, it is very likely that few retailers will have strong comps. September 2006 was the strongest month of the year and those results will be tough to beat.

Focused Retailers
Comp-Store Sales Trend
RetailerAugust 2007Previous 90 Days
American Eagle9.0%2.5%
Jos. A. Bank7.7%2.5%

Unfocused Retailers

Note: The information contained in this report has been obtained or developed from sources which we believe to be reliable, including but not limited to information published by the companies named in this report; but we disclaim responsibility for the accuracy of such information or for any use of such information by a reader of this report.Source: The Gordman Group
Comp-Store Sales Trend
RetailerAugust 2007Previous 90 Days
J.C. Penney–4.0%1.9%

For a full listing of monthly sales performance, visit www.chainstoreage. com, and click on Monthly Sales under “Industry Data” on the left column.

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