Retailers Report Sluggish Sales in August
New York City Many U.S. retailers struggled with a sluggish back-to-school season this August, though some discount and wholesale companies fared well as shoppers focused on buying essentials and in bulk.
Wal-Mart Stores Inc. reported a solid gain, but mall-based apparel stores, including teen merchants such as Wet Seal Inc. and Abercrombie & Fitch Co., reported dismal results. High-end retailers Saks Inc. and Nordstrom Inc. also posted weaker results as their affluent customers start to feel pinched.
Wal-Mart reported a solid 3% gain in same-store sales, helped by sales of groceries and back-to-school products. Including fuel, the retailer’s total same-store sales rose 3.5%.
“The underlying business performance for Wal-Mart U.S. continued to show strength and the improved relative performance has resulted in market share gains,” Eduardo Castro-Wright, the president and CEO of Wal-Mart’s U.S. stores, said in a statement.
Wal-Mart expects same-store sales to rise 2% to 3% in the current month.
Target Corp.’s same-store sales fell 2.1%, though that was better than the 2.6% decline that Wall Street expected.
Another bright spot is warehouse-club operators, as shoppers buy in bulk to save money. Costco Wholesale Corp. announced a 9% same-store sales increase in August on Wednesday as higher gas prices boosted sales. Excluding the effect of higher gas prices, Costco’s U.S. same-stores sales rose 6%.
Among luxury department stores, Saks recorded a 5.9% drop in same-store sales, steeper than the 4.7% decline that Wall Street expected. The weakest categories were women’s apparel, women’s shoes and intimate apparel, while the strongest categories were fashion jewelry, fragrances, men’s sportswear and men’s shoes.
Nordstrom recorded a 7.9% drop in same-store sales, a bit worse than the 7.1% decline expected.
Gap Inc. recorded an 8% drop, though it was less steep than the 9.7% decline projected by Wall Street. Meanwhile, Limited Brands suffered a 7% drop, mostly in line with the 6.9% decline estimated from Wall Street.
Business at teen merchants was disappointing. Abercrombie & Fitch suffered an 11% drop in same-store sales, worse than the 7.9% decline expected. Wet Seal recorded an 8.7% drop in same-store sales, as demand at its Arden B stores dropped.
Pacific Sunwear of California Inc.’s same-store sales fell 6%, though it was smaller than the 8.8% decline projected by Wall Street.
Bon-Ton Stores announces September Goodwill Sale
YORK, Pa. The Bon-Ton Stores announced its semi-annual Goodwill Sale, which will take place between Sept. 10 and Sept. 22.
Customers who donate clean, gently-used clothing and home textiles at participating locations will receive 20% off coupons toward the purchase of new fall merchandise, including apparel and cosmetics. One coupon is given per donated item. The donations will be sold at Goodwill Industries retail stores, where the revenue generates job training programs and career services for local communities.
In spring 2008, Bon-Ton’s semi-annual Goodwill Sale generated nearly 3.3 million pounds of donated clothing and textiles, which in turn earned an estimated $2.3 million in revenues for Goodwill.
“This semi-annual event is a wonderful benefit to our customers. Our customers can donate their items to be re-sold for a great cause while receiving a substantial discount on new fall fashions,” commented Bon-Ton Stores president and ceo Bud Bergren. “The Goodwill Sale exemplifies our commitment to the communities in which we operate.”
“Bon-Ton is a valuable partner,” said Jim Gibbons, president and ceo of Goodwill Industries International. “By donating to Goodwill, Bon-Ton shoppers are helping people in their local community find and keep good jobs.”
Staples 2Q sales up 18%
FRAMINGHAM, Mass. Staples reported that total company sales for the second quarter increased 18% to $5.1 billion compared to the second quarter of 2007. Net income declined 16% year over year to $150 million, and earnings per share, on a diluted basis, decreased 16% 21 cents, from the 25 cents.
“I am proud of our team for continuing to manage our business carefully during challenging economic times,” said Ron Sargent, Staples’ chairman and ceo. “We are optimistic about the future for each of our three businesses. We’re excited about the opportunity to drive immediate shareholder value by integrating the Corporate Express acquisition into our North American Delivery business, we’re working hard to improve store productivity in North American Retail, and we’re taking the right steps to build on our foundation for long term growth in International markets.”