Head designer out at Gap
New York City — Gap said its chief design director, Patrick Robinson, is leaving the company effective immediately. He had been executive VP of Gap Global Design for Adult and Body for four years.
The company said it will conduct a search for a successor.
Pam Wallack, head of the Gap Creative Center, made the decision to oust Robinson and will manage the design teams in the interim.
His departure follows a series of management shuffles and organizational changes aimed at reviving sagging sales of the brand.
Easter boosts sales in April, but caution is noted
New York City — Retailers reported strong April sales that were boosted by the late Easter holiday, which fell on April 24, three weeks later than last year. Same-store sales rose 8.9% at the 25 retailers tracked by Thomson Reuters, compared with expectations for an 8.2% increase. But the good news was tempered as retailers acknowledged that shoppers are under increasing pressure from rising gas prices and other cost increases.
"We are beginning to see the leading edge of consumers starting to pull back," said Ken Perkins, president of RetailMetrics LLC, in an Associated Press report.
Companies from Costco Wholesale Corp. to Hot Topic, reported strong revenue and beat Wall Street expectations. Limited Brands was one of the top performers. The chain raised its earnings outlook Thursday and said its same-store sales were up 20% in April. Analysts had predicted a 12% increase.
Sales at Macy’s rose 5.3% combined for March and April, surpassing its forecast of 4.5%.
Gap reported an 8% increase in sales, above estimates for a 0.8% decline, but said it expects its first-quarter merchandise margins to be “significantly down,” with raw materials costs rising more than it expected.
Costco posted a 12% rise in April same-store sales, ahead of expectations for 8.9%, and despite being closed on Easter. Costco operates gasoline stations at its sites and said higher fuel costs, as well as strength in foreign currencies, aided results.
BJ’s Wholesale said its April comparable sales were up 8.5%, with a contribution from sales of gasoline of 4.4%. Excluding the impact of gasoline, merchandise, BJ’s same-store sales rose 4.1%.
Both Costco and BJ’s said their chains experienced an increase in customer traffic with much of their sales growth was driven by fresh food.
Not all chains, however, exceeded expectations. At J.C. Penney, sales climbed 6.4%, falling short of the 8.5% estimate even as the company raised its first-quarter earnings guidance. Women’s and children’s categories were the strongest, followed by the men’s group. Geographically, the Southeast was the strongest performer, and the company said bad weather hurt sales and traffic in several regions throughout the month.
Kohl’s Corp. also came in below expectations. Its same-store sales climbed 10.2% in April, benefiting from strong sales of accessories, home and children’s items. The results fell short of the 15.1% increase expected by analysts.
Target Corp.’s same-store sales were up 13.1%, just below analysts’ expectations. The chain said its shoppers face increasing pressure on their budgets.
Target chairman and CEO Gregg Steinhafel said low prices are becoming more important as shoppers face "increasing pressure on their household budgets due to higher energy costs and increasing prices of food, apparel and home merchandise."
"Guests continued to be very cautious in their spending leading up to Easter," said Target CEO Gregg Steinhafel.
Indeed, consumers face pressure on all fronts. Gas prices are now over $4 in 13 states, and prices of food such as dairy and meat are also on the rise. Apparel stores are expected to pass on higher prices to shoppers starting this summer.
Removing the impact of higher gas prices and strengthening foreign currencies, same-store sales gained 7% in April, according to the Associated Press. The United States recorded a 6% gain while international sales rose 10%.
In other same-store sales results for April:
- Nordstrom posted a 7.6 %, below the 8.1% rise analysts were expecting.
- Stage Stores posted a 15.1% gain, when 13.8% was projected.
- Buckle’s sales rose 14.5%, ahead of expectations for 12.5%.
- Hot Topic’s sales increased 11%, ending 24 months of declines and exceeding analysts’ expectations.
- Saks’ sales were up 5.8%, missing expectations. The strongest categories included women’s contemporary and designer evening apparel, men’s apparel, women’s and men’s shoes, handbags, and fragrances. Saks Direct performed well during the month.
- Zumiez saw its sales jump 18%, topping Wall Street’s growth forecast of 14%.
- The Wet Seal reported that sales rose 11.8% at its namesake stores and 2.9% at Arden B stores. Its results beat expectations.
- Cato Corp. posted a 17% rise in same-store sales, when 12.5% was projected and lifted its first-quarter guidance.
- TJX Cos.’ sales rose 5%, ahead of expectations.
- Fred’s posted a 1.8% gain, below analysts’ expectations as the company’s stores faced severe weather in the Southeast.
- Macy’s said its April same-store sales rose 10.9%, exceeding expectations. (Online sales are included in the same-store sales calculation for Macy’s.)
“Macy’s and Bloomingdale’s both performed well in stores and online. As a result, we also exceeded our own aggressive expectations for the combined March-April period and for the first quarter,” said Terry J. Lundgren, chairman, president and CEO of Macy’s.
For the first quarter, Macy’s sales totaled $5.892 billion, up 5.7% from total sales of $5.574 billion in the first 13 weeks of 2010. Same-store sales were up 5.4%.
April sales increase 3% for Fred’s
MEMPHIS, Tenn. — Fred’s on Thursday tallied $141.8 million in sales, representing an increase of 3% for the four weeks ended April 30, the retailer reported Thursday.
Comparable-store sales for the month rose 1.8%, versus an increase of 0.6% in the same period last year. Likewise, Fred’s total sales for the first three months of fiscal 2011 increased 3% to $484.4 million.
"The combination of the [recent] storms, along with rising food and gas prices, is becoming a real challenge for our customers,” stated Bruce Efird, Fred’s CEO. “As a result, even though customer traffic met expectations, average ticket, as one might expect, was down as historically key departments such as lawn and garden, and soft lines were below plan.”
During April, Fred’s opened one new store and two pharmacy express locations.