FINANCE

Shift in Easter, wet weather put a damper on April sales at Kohl’s, J.C. Penney and other chains

BY CSA STAFF

New York City An early Easter that shifted some business into March and rainy weather in the second half of the month took a toll on retailers’ sales in April. Still, many chains said combined results in March and April that stripped out the Easter impact showed solid consumer demand. A host of retailers, including Kohl’s Department Stores and Macy’s, boosted their first-quarter outlook Thursday as revenue climbed faster than expected.

Overall, retailers’ April sales rose 0.5%, missing estimates of a 1.7% increase, with about 70% of retailers falling short, Thomson Reuters data showed. Combining results for both March and April, however, sales rose 4.8%, stronger than trends seen in both January and February and the best since November 2007, Thomson Reuters data showed.

“Consumers took a breather in April,” said Ken Perkins, president of RetailMetrics, a research firm, in an Associated Press report. “But overall, retailers have to be pleased with the spring selling season.”

But Perkins added that the consumer spending recovery is still likely to be slow amid persistent high unemployment and tight credit.

According to the International Council of Shopping Centers Index of 30 retailers, the key measure was up 0.8%, compared with a 2.7% decline a year ago. For the March and April months combined, the index rose 4.9%, well above the average pace of 4.1% since January.

“The real takeaway is that profitability continued to improve on the healthy underlying demand,” said Michael P. Niemira, chief economist at ICSC.

Discounters, including Costco Wholesale Corp. and BJ’s Wholesale Club, were among the biggest winners in April. Macy’s also had solid gains. Teen merchants continue to struggle with declines.

At Macy’s, same-store sales edged up 1.1% in April, beating the decline analysts predicted. Total revenue for the four-week period ending May 2 rose 2.8% to $1.74 billion.

For the first quarter, Macy’s same-store sales rose 5.5%, above the company’s guidance. Total revenue rose 7.3% to $5.58 billion.

Kohl’s said its same -store sales decreased 7.7% in April and total sales decreased 5%, which the chain attributed to the timing of Easter and grand-opening events at Kohl’s Department Stores.

Total sales for the four-week month ending May 1 were $1.13 billion, compared with $1.2 billion a year earlier. For the quarter and year-to-date, total sales increased 10.9% to $4.04 billion, and same-store sales increased 7.4%.

Kohl’s chief executive Kevin Mansell said Kohl’s executives expected the decrease in April sales.

Kohl’s e-commerce business in April continued “to generate significant growth, achieving a 50% increase in sales in the first quarter,” Mansell said.

From a regional perspective, the Southeast and South Central regions led the company for the month. Footwear, women’s and men’s merchandise achieved the strongest comparable-store sales performance during the month.

In other same-store sales results for April:

  • J.C. Penney said its sales fell 3.3%, with overall sales falling 3.7% to $1.22 billion. Analysts polled by Thomson Reuters expected a 0.8% same-store sales fall. The retailer hiked its first-quarter earnings view on better-than-expected gross margins.
  • Bon-Ton Stores said its stores fell 5% in April, hurt by the shift of Easter sales into March this year. Total revenue for the four weeks ended May 1 fell 5.2% to $189.1 million, from $199.4 million in the prior-year period. For the quarter ended May 1, revenue in stores open at least one year rose 3% while total revenue rose 2.6% to $661.4 million.
  • Saks’ sales rose 3.2% in April. Analysts had expected a rise of 4.4%. Saks said total sales for the month of April rose 3.4%.
  • Dillard’s sales dropped 5%, worse than Wall Street had expected.
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CSA Editor’s Pick: Levi’s London flagship

BY Marianne Wilson

Levi’s has relaunched its London flagship on Regent Street after a massive facelift that has completely transformed the interior. The refurbished two-level, 8,500-sq.-ft. store aims to tell the story of the craft that goes into Levi’s denim making. The store combines authenticity, craftsmanship and storytelling to deliver a complete brand experience — one that engages customers even as it helps them with the jean-buying experience. All that aside, it’s a pretty cool store.

With a factory-inspired architectural design, the redone Levi’s takes customers on a journey through the brand’s evolution and the history of denim itself. All of the featured materials, which include exposed brick, raw steel, concrete, wood and glass, in some way connect with the essence of the workplace theme.

From the street, customers enter a transition space with reclaimed brick walls that is home to an ever-changing gallery that showcases everything from exclusive product collaborations to art exhibitions. The area works as a bridge between the youthful creativity and the contemporary scene and the artisan workplace.

Customers then move through two sets of huge factory doors to the main-level selling space, home to the latest collections. The space has a clean and industrial look and feel, with furniture and fixtures that are simple, but flexible enough to allow for an ever-changing environment.

A contemporary staircase leads down to the basement level. Backlit glass risers with Levi’s “XX” laser are cut into each tread. Alongside the stairwell is a gallery wall exhibit with a design inspired by glass-fronted storage cabinets. Among the items on display: an original 201 Jean from the 1920s (on loan from Levi’s archives) encased in glass and set against a backdrop of tailor’s patterns. The display speaks volumes about the brand’s longevity and also acts as a visual signpost for the adjacent Levi’s Vintage Clothing collection.

The basement is home to the 501 Jeans warehouse, separated from the rest of the store by floor to ceiling glaze and a mirrored back wall. Some 22 different washes are on display.

Close by is the “Inspection Room,” which is split into zones that allow customers to shop either by fit or finish. To ease the process, key fits and finishes are displayed on tailor’s forms and in illuminated inspection cabinets. A simple-to-follow number and letter navigation system takes customers to stock held in adjacent wall bays.

Among the store’s points of distinction are the fitting rooms, crafted with duck canvas that recalls the original canvas used by Levi Strauss in the 19th century. The doors are scaled versions of the heavyweight industrial doors found at the store entrance. An adjacent display of vintage weaver’s equipment pays homage to the brand’s craft and roots.

Levi’s was designed by Checkland Kindleysides, Cossington, Leicestershire (U.K).

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Costco COO to retire in June

BY CSA STAFF

ISSAQUAH, Wash. Costco Wholesale has announced the retirement of Dick DiCerchio as its senior EVP and COO, effective June 4.

Jim Sinegal, Costco’s CEO, stated: “Dick has made invaluable contributions to the growth of our company, having spent 27 years in all facets of our operations, culminating with his positions as senior EVP and a member of the board of directors. Under his leadership, the company has trained and developed a broad and deep team of executives across the globe. Jeff Brotman, I, our board of directors, and our employees are deeply grateful to Dick for all his contributions to our success and wish him a healthy and productive retirement.”

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