Department stores strong in October, led by Nordstrom
New York — As the holidays approach and retailers are still recovering from Hurricane Sandy, October same-store sales results showcased consistent strength in the department store category.
Nordstrom led the pack with a 9.8% rise in same-store sales for the month, and Macy’s Inc. had a solid showing as well.
“Business was strong in October,” said Terry J. Lundgren, chairman, president and CEO of Macy’s, Inc. “The key growth strategies we put in place three years ago continue to provide us new opportunities for continuous improvement in driving sales. We are feeling confident about our prospects for the upcoming holiday season and have increased our sales guidance for the fall season, despite the interruption caused by Hurricane Sandy in the first few days of the fourth quarter.”
Macy’s reported a 4.1% same-store sales rise in October and posted total sales of $1.908 billion for the four weeks ended Oct. 27, an increase of 3.6% compared with $1.842 billion in the prior-year period.
Macy’s said it is raising its guidance for same-store sales growth in the second half of 2012 to approximately 4% (an increase from previous guidance of up approximately 3.7%).
Kohl’s Corp. reported a 3.3% same-store sales rise on Thursday, and total sales increased 2.6% in the third quarter. The company also announced that it would no longer report monthly sales, effective fiscal 2013.
Other department store same-store sales results in October include:
- Stage Stores beat Wall Street expectations with a 6.5% rise, when just 2.8% was forecast; and
- Bon-Ton Stores gained 3.7%.
October comps a mixed bag
New York — With retail books closed prior to Hurricane Sandy’s arrival in the Northeast, most retailers experienced same-store sales gains for the month of October, some with stronger showings than others.
The 17 retail chains tracked by Thomson Reuters are predicted to report 4.3% growth in October same-store sales, up slightly over the 4.1% advance reported in the year-ago period and a significant gain over September’s 0.8% rise.
Among specialty retailers, Gap and Limited showed the greatest muscle in a weaker October category, with lifted same-store sales of 4% and 3% respectively.
Gap Inc.’s swing to a 4% same-store sales gain in October from its 6% decrease in the same period last year represented measurable strides for the company, said CEO Glenn Murphy. “We’re very pleased with the continued momentum in the business across all brands in North America,” said Murphy. “Our focus remains on offering great product to our customers in order to sustain our business performance.” By brand, Gap North America recorded a 6% Oct. same-store sales gain versus negative 5% last year, Banana Republic North America was up 5% versus up just 1% last year, and Old Navy North America recorded a 5% same-store sales gain versus negative 9% last year.
For the quarter, Gap reported an 8% increase in net sales to $3.86 billion, and it has raised its third-quarter guidance 60% over last year.
At Limited Brands Inc., sales momentum slowed as the October 2012 same-store sales gain of 3% missed Wall Street’s expected 5% rise. Victoria’s Secret was the big disappointment as same-store sales growth slowed to 3% while analysts expected a 6.1% gain.
The Buckle surprised with a 3.8% same-store sales rise, when a decrease of 1.3% was expected.
Other same-store sales results among the specialty retail category include:
- Wet Seal’s comps dropped 7.6%;
- Zumiez edged up 0.6%;
- Cato was flat; and
- Hot Topic rose 0.2%.
Walgreens, Alliance Boots form new jointly owned company: Walgreens Boots Alliance Development
DEERFIELD, Ill. — Walgreens has formally set up a new company, jointly owned with Alliance Boots, as part of their strategic partnership’s synergy program.
The new company, called Walgreens Boots Alliance Development, will be based in Bern, Switzerland.
No other details were released.
Walgreens and Alliance Boots first announced their proposed acquisition strategy in June and last month named CFO Wade Miquelon to an expanded and global leadership role as president of value creation services and international division. In that capacity, Miquelon serves as Wasson’s senior leader in collaborating with Alliance Boots management team to execute the new global strategic partnership.
At the time, Walgreens also named Robert Zimmerman, SVP international and international chief administration officer, as the lead executive for the Walgreens-Alliance Boots’ "synergy team." Former Wellpoint senior executive Brad Fluegel assumed the role of chief strategy officer at Walgreens.
As part of the Alliance Boots announcement in June, Walgreens stated that it expects combined synergies across both companies of between $100 million and $150 million in the first year and $1 billion by the end of 2016. To carry out a focused effort to capture those synergies, the company is setting up six new “global synergy teams” in Miquelon’s new organization that will work closely with Alliance Boots.
By 2016, the deal is projected to transform Walgreens from a $72 billion operator — with two-thirds of its revenue coming from its U.S. pharmacy business — to a $130 billion global health-and-wellness player.