Apparel retailers have mixed results in July
New York City — The nation’s specialty apparel retailers reported mixed results in July. as Hot Topic and Limited Brands turned in strong performances, while Gap and Aeropostale stumbled.
Hot Topic said its same-store sales rose 7.3% in July. far exceeding the 0.5% rise in analysts’ forecast. Hot Topic said the measure rose 6.2% at its namesake stores and rose 11.8% at its plus-sized Torrid division. The teen retailer also raised its second-quarter outlook.
At Limited Brands, same-store sales rose 6%, compared with analysts’ estimates of 4.2%. Sales were up 9% at Victoria’s Secret and 2% at Bath and Body Works.
Aeropostale said that its same-store sales for the second quarter fell 14%, worse than analysts expected. The chain cut its second-quarter outlook.
Net sales for the second quarter of fiscal 2011 decreased 5% to $468.2 million, from $494.7 million in the year-ago period.
“We are very disappointed with our second-quarter financial results that were clearly unacceptable. As a result of a lack of balance in our merchandise assortments, as well as continued promotional and macroeconomic challenges, we significantly increased the depth and breadth of our promotions and markdowns," CEO Thomas Johnson said in a statement.
Gap reported that its same-store sales for July, including online sales, were down 5%. Same-store sales in North America for the company’s core division in fell 6%, worse than analysts expected, but the clothing seller reported total second-quarter revenue that topped Wall Street’s forecast. At Banana Republic North America, same-store sales fell 4%, and at Old Navy North America, sales fell 3%. Gap said same-store sales for its international division fell 10%.
In addition, Gap reported net sales for the second quarter, which ended July 30, 2011, increased 2% to $3.39 billion compared with $3.32 billion for the second quarter last year.
“While July proved to be challenging, we’re pleased that we grew net sales for the quarter and that we’re able to guide earnings per share above analyst expectations,” said Glenn Murphy, chairman and CEO of Gap.
Abercrombie & Fitch Co. said Thursday that its same-store sales rose 9% in the second quarter, with increases across all its brands. (Abercrombie no longer reports same-store sales on a monthly basis.) Sales were up 5% at Abercrombie & Fitch stores, 7% at Abercrombie kids stores and 12 % at Hollister Co.
Revenue rose 23% to $916.8 million from $745.8 million for the quarter ended July 30, better than analysts expected. Year-to-date, same-store sales are up 9%.
In other apparel same-store sales results for July:
- Ross Stores’ saw its same-store sales increase 7.7% in July, and the company raised its second quarter estimate. The chain said dresses and shoes were its best-performing merchandise categories during the month, while Texas and Florida were its strongest markets.
- At Zumiez, sales rose 4.9%, short of expectations. Zumiez said shoppers bought more shoes and men’s clothing during the period, but sales of accessories and boys clothing were soft. The retailer’s total revenue rose 12.3% to $38.7 million.
- Wet Seal’s sales increased 7.4%, easily beating Wall Street’s estimate. Sales were up 7.8% for Wet Seal stores and 5 % for Arden B.
- The Buckle said its sales rose 6.8%, short of analysts’ forecasts.
- Cato Corp.’s sales fell 3%, which the chain attributed to difficult economic conditions for consumers.
Kohl’s lags behind Macy’s, JCPenney in comps growth
CINCINNATI, MENOMONEE FALLS, Wis., and PLANO, Texas — Macy’s emerged as the big winner among department-store retailers this July, reporting sales growth that exceeded expectations. JCPenney also faired well for July, while Kohl’s sales disappointed.
Macy’s Inc. reported total sales of $1.6 billion for the four weeks ended July 30, an increase of 5% compared with total sales of $1.525 billion in the four weeks ended July 31, 2010. On a same-store basis, Macy’s Inc. sales were up 5% in July.
“Our July sales performance once again exceeded our expectations and represented a continuation of the balanced success we have seen throughout the year. Store and online sales throughout the second quarter continued to be strong at both Macy’s and Bloomingdale’s. This is especially encouraging given the comparison to our robust same-store sales performance in July and second quarter last year,” said Terry J. Lundgren, chairman, president and chief executive officer of Macy’s Inc.
JCPenney reported that total sales for July increased 1% to $1.17 million from $1.16 million for the same period last year. Comparable-store sales for the month were up 3.3%. According to the company, its strongest categories for the month were women’s apparel and accessories, and fine jewelry.
Kohl’s reported that total sales for July decreased 2.9% to $1.12 million from $1.16 million, and comparable-store sales decreased 4.6%.
Kevin Mansell, Kohl’s chairman, president and CEO, commented, “Our July comp sales results were disappointing, particularly given the strong June results we had achieved. I am, however, especially pleased with our ability to manage our inventory and expenses resulting in better than planned gross margins as well as better than planned leverage on our expenses. Early indications of customer reaction to higher apparel prices are in line with our expectations in terms of unit demand.”
Kohl’s said it now expects its second quarter earnings to be $1.07 to $1.08 per diluted share, compared with its previous guidance of 96 cents to $1.02 per diluted share.
Capturing Customer Feedback
By Scott Zimmerman
The days of collecting customer feedback through an annual survey are over. Today, retailers are utilizing online and mobile tools that not only serve as “real-time” feedback mechanisms, but also act as bustling hubs of customer conversations and activity online.
From online surveys to written comment forms and customer focus groups, companies have employed a range of techniques to listen to their customers. But while collecting customer feedback can create a competitive advantage, it’s how you act on feedback that really makes the difference.
Every day, companies solicit feedback from customers, yet only a few actually take action or let the customer know their voice was heard. If you handle it right, the dialogue between you and your customers can become the lifeline of your business.
Many retailers are turning to engagement communications to begin that dialogue.
Engagement communications blends advances in technology, such as voice mail, text messaging, e-mail and social media, with a human touch. Together they create points of engagement with a customer rather than just a simple connection. Making a connection might inform but it doesn’t necessarily motivate consumers to take action. Create engagement points and the path is opened up for activation — in this case, giving customers a channel to provide the feedback you need to improve not only their purchase experience, but your bottom line.
Engagement communications involve tailored and personalized campaign-based outreach to determine the kinds of information customers want to receive. Because the messages are sent in a format the customers prefer, they encourage two-way dialogue which keeps customers emotionally connected and willing to provide their honest feedback.
For example, knowing that a certain segment of his customers have school-aged children, a retailer could utilize Engagement Communications technology to send an e-mail message offering special discounts on clothing and school supplies in their store or on their website.
Similarly, a retailer can use their purchase history data to build targeted engagement communications campaigns. Text messages can be delivered to shoppers to promote the arrival of a new shipment of electronics, or a friendly message to notify a shopper that an item in an advertised special was no longer available in order to save her a trip into the store. The messages engage customers in meaningful ways because they are relevant and timely, and the two-way nature of the messages allows customers to provide immediate feedback in real-time. With this real-time view, companies can truly get to know and proactively care for their customers, ultimately fulfilling their brand promises.
Customer feedback programs are most effective when the entire company listens and responds to the voice of the customer. Getting useful customer feedback requires a culture in which your employees are always looking and listening, and, at the right time, are empowered to act. Employees are most valuable to customers when they have the knowledge and resources to address customer concerns. And customers are more likely to give feedback to someone they believe is empowered to act.
Another key to gaining useful input is knowing when to solicit feedback. Don’t expect a customer to complete a survey the minute they walk in your door or log on to your homepage. Rather, allow them to make a purchase, and then use that as an opportunity to follow-up with an e-mail or online poll about how you could improve their shopping experience. Most customers don’t need an incentive to share their ideas and experiences with you. They simply want to know they have been heard and that you value their business.
Once you gather customer feedback, it’s important to use that information to continue to improve on things that are working, and address specific challenges. The action you take gives power to the customer feedback process.
When you have made a change that is customer-driven and meaningful, you can utilize online communications to close the loop with the customers who were part of the feedback process. But when you are correcting a problem, it’s best to get back to that customer with a personal, detailed response. This step is critical, because customers will be encouraged to give input if they know they are being heard and know they may be driving change.
The challenge is that most companies have traditionally been wired from the ground up to operate in a world of company-controlled communication, and they’re simply not equipped to engage in real-time conversations. But, with people sharing more and more of their lives today through online technologies, the rules of customer communication and feedback are changing. It is critical to not just listen, but to understand what’s being said and then to act accordingly. The work is not in the listening, but in the implementation and follow-up.
As a result, companies are rewiring their operations to be more customer-centered, more relationship-oriented, and more transparent by weaving online communication tools into customer service processes. This will improve communication from beginning to end — from initial conversation to ongoing collaboration in the customer relationship.
It just makes good sense. Customer feedback can spur everything from short-term promotional campaigns to business transformation. By knowing what customers want and by using the right communications tools to keep them engaged, retailers can capture the customer feedback they need to deliver solutions that have a positive impact on both the customer experience and their bottom line.
Scott Zimmerman, president of TeleVox Software, is a regularly published thought leader on Engagement Communications. He leads all aspects of TeleVox operations including client operations, sales, information services, product development and marketing.