Federated Denim Glut
Cincinnati, Federated retail brands, among them Macy’s and Bloomingdale’s, may soon be facing the same denim glut that has caused retailers like Gap and Limited to discount jeans.
According to a Legg Mason analyst, retailers like Federated and American Eagle responded to a surge in popularity for torn, embroidered and paint-splattered styles last year and bought on average 10% more denim apparel this season.
But sales in August and September, the biggest selling season after Christmas, are expected to be in the 5% range, according to the International Council of Shopping Centers, down from an initial forecast of as much as 6%.
Chico’s Posts Strong Quarter
Fort Myers, Fla., Chico’s FAS posted a record second quarter net income of $49 million, an increase of 38.4%. Comparable-store sales for the company-owned stores increased 15.7% for the 13-week period ended July 30, compared to the same 13-week period last year. Net sales for the second quarter rose 34.6% to a record $343 million, up from $255 million.
The company also announced that it plans to open 20 new Soma by Chico’s stores during fiscal 2006 over and above the combined 20% net square footage growth rate planned for the Chico’s and White House | Black Market brands. Scott A. Edmonds, president and CEO, commented, “The second quarter came in with very strong results as we generated an operating margin in excess of 22%, a sales increase of 35% and a net income increase of over 38%.”
On-Line Retailers Turn to Blogs to Attract Shoppers
Nationwide, On-line retailers are creating their own Web logs, or blogs, to promote themselves to consumers. The strategy seems to be successful. According to a recent study by ComScore Networks, an on-line market-research firm, shoppers who visit blogs spend approximately 6% more than average on-line shoppers.
Bluefly.com, EHobbies and GourmetStation all use blogs as part of their advertising. Bluefly.com sells designer clothes; EHobbies sells hobby goods such as plastic models, kites and science kits; and GourmetStation sells prepared foods. The companies post industry news and trends on their blogs, allowing visitors to engage in discussion about the topics.