FINANCE

Retailers Show Sales Surge in February

BY CSA STAFF

New York City, Retailers posted an industrywide same-store sales gain of 4.9%, according to the International Council of Shopping Centers. American Eagle Outfitters, Warrendale, Pa., paced the field with comps of 32.4%. Also strong were Target Corp., which posted a 9% comp-store sales surge, and Brisbane, Calif.-based bebe, which reported a 15.3% comp-store gain.

The ICSC had expected sales growth of about 3%. “Although it seems that not one factor in particular was overwhelmingly dominant, it was clear that some improvement in the labor markets may have been one of the contributing reasons for the better-than-expected increase for the month,” said Michael Niemira, ICSC’s chief economist.

February 2005 also had the advantage of a Super Bowl, which last year was held in January. “I think the Super Bowl had something to do with the growth,” said William Cody, managing director of the Baker Retailing Initiative at the Wharton School in Philadelphia. “On the apparel side, it’s a two-pronged thing. Folks are flowing fashion a lot earlier now, and companies are selling more at full price.”

Gap Inc. had a disappointing month in terms of comp-store sales, posting a 3% decline. The San Francisco-based chain pointed to strong margin improvements, however.

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Wal-Mart Canada Store to Vote on Unionization

BY CSA STAFF

Windsor, Ontario, Wal-Mart workers in Windsor, Ontario, will soon vote on whether to be represented by a union. The United Food and Commercial Workers Canada (UFCW) today said that it filed an application for certification with the Ontario Labor Relations Board, and an employee vote on unionization is expected to happen as early as next week.

When a Wal-Mart store in Jonquiere, Quebec, unionized early last month, the company closed the store, arguing that union demands were threatening the store’s business. Shortly thereafter, the Quebec Labour Relations Commission told Wal-Mart Canada to stop intimidating employees who wished to unionize. The UFCW has successfully unionized a Wal-Mart branch in Saint-Hyacinthe, Quebec, and said it has 12 other applications for certification pending with the labor board.

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FINANCE

May-Federated Merger Could Stress Vendors

BY CSA STAFF

New York City, The May-Federated merger, which would create a $30 billion retailer, may put stress on department store vendors, according to analysts. Consolidation may cause store closings and reduce the number of outlets for apparel makers’ merchandise. Additionally, the combined force of May and Federated may leave vendors with less price negotiation leverage.

Fashionable, premium-priced vendors such as Liz Claiborne and Polo Ralph Lauren will likely fare best in the altered department store environment, according to Merrill Lynch analysts. Manufacturer Jones Apparel, which includes Jones New York, Anne Klein, Evan-Picone and Kasper, may be left vulnerable since about one-quarter of its revenue comes from sales to May or Federated stores. Analysts say that manufacturers with distribution channels outside the department store sector will be left less vulnerable to the merger.

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