September Sales Reflect Struggling Economy
New York City Wal-Mart Stores and warehouse clubs were the only bright spots in September as skittish shoppers increasingly cut back on non-essential purchases.
“This is not a significant comfort going into the holiday season,” said Ken Perkins, president of research company RetailMetrics LLC, in an Associated Press report. “Everybody across the board is feeling it. Even discounters are going to have a tough go. Consumers are going to tighten their purse strings even more.”
Wal-Mart posted a 2.4% increase in September same-store sales, shy of the 2.5% increase many analysts expected. The discounter said hurricanes caused 341 stores to temporarily close and hurt same-store sales by 0.4 percentage point. Total September sales rose 6% to $36.23 billion.
Meanwhile, same-store sales jumped 7% at Costco Wholesale Corp., less than the 7.5% increase analysts expected.
BJ’s Wholesale Club Inc. reported its September same-store sales rose 10.4%, boosted by higher demand for both merchandise and gasoline. Total sales rose 11.8% to $892.8 million. Excluding gasoline sales, traffic increased about 4% and the average transaction amount increased by about 1%, the company said. Food sales rose about 10%.
For the first nine months of this year, the company said its same-store sales rose 12.6%, while total sales increased 15% to $6.58 billion.
Same-store sales at Target fell 3% in September. The retailer cut its earnings outlook as it grapples with a surge of customers defaulting on the company’s store credit-card payments. Target said it could miss third-quarter expectations amid a challenging sales environment. Total sales for the five-week period rose 2.5% to $5.32 billion.
Kohl’s Corp. said its same-store sales dropped 5.5% in September, beating Wall Street’s consensus forecast, while lowering expectations for its third-quarter earnings release. Total sales for the five-week period ended Oct. 4 rose 0.6% from the comparable period in 2007.
For the year-to-date period, same-store sales fell 5.6%, while total sales rose 2.4%.
Among teen retailers, Pacific Sunwear of California Inc. had a 5% drop, better than the analysts’ target.
American Eagle Outfitters Inc. had a 6% drop, worse than the 5% decline projected. The company said total sales for the year-to-date, 35-week period ended Oct. 4 increased 2% to $1.87 billion, compared to $1.85 billion for the 35 weeks ended Oct. 6, 2007. Same-store sales were down 7% for the year-to-date period.
Other specialty-apparel retailers also struggled. Mothers Work Inc. said Wednesday that same-store sales fell 1.3% in September due to the closing of Sears leased departments and a calendar shift.
Children’s Place Retail Stores Inc. said same-store sales for September were flat compared with the same month last year.
Cache reported a 6% decline in its same-store sales.
Bakers Footwear Group reported a 4.1% increase in September sales.
The situation was especially grim for mall-based apparel and department stores.
J.C. Penney reported a 12.4% drop in same-store sales, even worse than the 9.9% decline that analysts had expected. The company cut its earnings and sales outlook for the third quarter.
The Bon-Ton Stores Inc. said its same-store sales fell 4.6%, better than the 6% decline analysts predicted. Same-store sales at Dillard’s slid 12%.
Luxury retailers also were down. Saks Inc. said same-store sales in September fell 10.9%, a worse drop than analysts expected. For September, the strongest categories at Saks Fifth Avenue were jewelry, fragrances and cosmetics. The weakest categories were women’s apparel and men’s clothing and dress furnishings.
The company said the challenging economic environment will continue for the rest of its fiscal year. It expects same-store sales for the second half of its fiscal year will be worse than its previous expectation of flat to a low-single digit decline.
Nordstrom Inc. said Wednesday its September same-store sales dropped 9.6%, blaming the ongoing turmoil in the financial markets. Analysts has expected a same-store sales decrease of 7.1%. Total sales fell 5.8% to $718 million from $762 million in the same month last year.
Sears goes interactive with Kenmore brand
CHICAGO Sears Holdings announced that it has launched its first interactive “Kenmore Live Studio,” which will bring creativity and innovation together in a single location where consumers of all ages can explore their own talents.
The entire “Kenmore Live Studio” is equipped with cameras that will broadcast video via the Internet, so studio visitors will have the chance to share their voice with the world, the company reported. Demonstrations by chefs, presentations or unveilings of new products will be shared in real time with those following the Kenmore brand via its social media page on Facebook.
“The Kenmore brand has been an icon in American homes for more than 82 years and we recognize that even great brands like Kenmore need to reinvent themselves periodically to continue to meet the changing needs of our customers,” said Guenther Trieb, SVP and president of brands for Sears Holdings. “We’re proud of the brand’s recent evolution and now the ‘Kenmore Live Studio’ will give customers the opportunity to engage with the brand and see our new vision firsthand. The studio is going to be an open stage where anyone can come to share their creativity and ideas — they’ll have the chance to inspire others and be inspired themselves.”
The “Kenmore Live Studio,” located in downtown Chicago at Huron and Wells will be open to the public every Thursday through Sunday. Studio hours will be as follows.
The studio will also put a spotlight on appliance design by presenting Kenmore appliances as works of art. The Kenmore appliance gallery will include the new line of Kenmore and Kenmore Elite High-Efficiency Front Load laundry.
“We’re looking forward to seeing how customers will interact in the ‘Kenmore Live Studio’ as their engagement will be the key to making this initiative a success,” said Betsy Owens, VP and general manager of Kenmore. “The studio is not a store – it’s all about having customers engage with the brand directly and connect with the new side of the brand.”
Foot Locker gets a new strategic plan
NEW YORK Ken Hicks, chairman and CEO of Foot Locker, has announced a new strategic plan for the company.
“Foot Locker is a recognized leader in specialty athletic retailing, with a portfolio of well-known brands and banners. The company has a strong financial position and many high potential opportunities to increase its sales and profits, both in United States and international markets,” stated Hicks. “Our senior management team undertook a process over the past several months to thoroughly understand our position in the marketplace today and to develop strategic priorities for the future. In doing this, we established a clear strategic vision: to be the leading global retailer of athletically inspired shoes and apparel.”
Priorities in Foot Locker’s strategic plan include being the power merchandiser of athletic shoes and apparel, developing a compelling apparel assortment, improving the in-store and online shopping experience, pursuing growth opportunities, increasing asset productivity and building its retail team.
Over the next five years, the company said it expects to achieve: sales of $6 billion and a net income margin of 5%.