Retailers See Holiday Sales Rebound From Grim 2008

The nation’s retailers on Thursday confirmed that they had a merry Christmas in 2009, a year after weathering the worst holiday shopping season in decades.
Retailers as varied as Costco and Saks posted robust year-over-year increases at stores open at least a year, a crucial measure of retail health known as same-store sales. Some chains — TJX Companies, Ross Stores and Aeropostale — reported double-digit increases. And a number of retailers raised their earnings estimates, suggesting the nation’s stores are in the early stages of a turnaround.

As Ken Perkins, president of the research firm Retail Metrics, said Thursday in a report: “Santa delivers the goods.”

Over all, the industry turned in a 2.9 percent increase in December compared with the period a year ago, according to Thomson Reuters. Some 75 percent of retailers beat analysts’ estimates.

Retailing groups calculated in recent days that sales for the combined months of November and December rose 1 to 2 percent from a year ago. Industry professionals were pleased Thursday that the results were at the high end of estimates and that retailers were not forced to discount as dramatically as they did in 2008.

Of course, the industry’s 1 to 2 percent increase is not an all-clear signal. Stores are comparing their 2009 results to the bleak numbers of 2008. Additionally, the chains benefited this winter from an extra selling day before Christmas.

Still, December was a reversal of recent trends, with sales increases the norm rather than the exception.

Even luxury chains, the stores hit hardest by the downturn in 2008, bounced back with higher sales: up 9.9 percent at Saks, up 7.4 percent at Nordstrom, and up 4.9 percent in the specialty retail segment of Neiman Marcus, which includes Neiman Marcus and Bergdorf Goodman stores.

Discount retailers continued to thrive with sales climbing 9 percent at Costco, 4.8 percent at BJ’s Wholesale Club, and 1.8 percent at Target. (Wal-Mart, the nation’s largest retailer, stopped reporting monthly sales figures last year.)

Gregg W. Steinhafel, Target’s president and chief executive, said in a statement on Thursday that the results were much better than expected because of “stronger than-anticipated guest traffic throughout the month,” which drove sales of clothing, electronics, toys, food, and health and beauty products.

Clothing chains that sell designer names at low prices shined again. TJX Companies, which owns T.J. Maxx and Marshalls stores, had a 14 percent increase. Ross Stores, a TJX competitor, posted a 12 percent increase. Sales at value-priced retailer Kohl’s rose 4.7 percent.

Despite the good news, retailing analysts are concerned that against a backdrop of high unemployment, consumers could go into hiding again now that the holidays are over.

Indeed, analysts at Thomson Reuters have noted in recent months that consumers are still holding fast to their discretionary dollars, and they cited as an example the weak numbers posted by many stores that cater to teenagers. That sector fared the worst in December, posting a 2.5 percent same-store sales decline.

Same-store sales fell at Abercrombie & Fitch (down 19 percent), Hot Topic (down 10.9 percent), American Apparel (down 5 percent), Wet Seal (down 4.6 percent), and Limited Brands, which owns chains like Victoria’s Secret and Bath & Body Works (down 2 percent).

The declines were not across the entire teenage clothing category, though. Sales increased at Aeropostale (up 10 percent), American Eagle Outfitters (up 7 percent), Buckle (up 6.6 percent), Gap (up 2 percent thanks largely to its value-priced Old Navy division), and Zumiez (up 0.3 percent). Sales at Children’s Place increased 4 percent.

Mid-priced department stores, a sector that has been struggling for a while, posted some of the month’s weakest numbers. Sales declined 7 percent at Dillard’s, 3.8 percent at J.C. Penney, 2.6 percent at Bon-Ton Stores and 2 percent at Stein-Mart.

At Macy’s, sales ticked up 1 percent. Terry J. Lundgren, the president and chief executive, said in a statement that sales at both Macy’s and Bloomingdale’s were better than 2008, and that Bloomingdale’s had a particularly robust December, with strong sales in gifts and designer brands.

Drug stores, which had been performing well because they sell necessities, collectively posted a 0.8 percent decline. That was worse than analysts were expecting. What is good for consumers — fewer colds and coughs — is of course bad for the stores.

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