December '04 Sales Good … at the Last Minute
The Holiday season ended on an overall strong, cheery note, with the retail sector of the economy increasing 2.7 percent on a year-over-year basis, according to the New York–based International Conference of Shopping Centers.
But apparel retail fell 0.6 percent in December, according to a report by the U.S. Department of Commerce. Michael Niemira, chief economist of the ICSC, blamed much of the dip on discounting.
In addition, retailers had to wait for their Holiday business. Most shoppers bought their gifts at the last hour. The retailers’ delayed gratification was a message from consumers, said Liz Pierce, senior vice president of the Los Angeles offices of Sanders Morris Harris.
“During the last few years, there’s been increasing evidence that consumers are good at holding out,” Pierce said. “They’re saying, ’You got to make it worth our while.’”
According to Pierce, the customer will shop early, but they need a “must-have” item such as an Apple iPod to entice them.
The stellar sales of the season were earned by retailers that provided a retail alternative, such as Chico’s FAS Inc., based in Fort Myers, Fla. The retailer, specializing in contemporary casual fashions for the oft-overlooked baby boomer market, earned comparative-store sales that were 18.6 percent higher than those of the previous year.
Likewise, Brisbane, Calif.–based Bebe Stores Inc. enjoyed one of the highest same-store sales increases of the 21 retailers tracked by this index. Bebe’s comparative sales increased 28 percent, beating Pierce’s estimate of a more than 14 percent increase.
Bebe’s success has much to do with the company being the first to market with the latest runway looks, according to Pierce. She forecast that the retailer’s sales will continue to be high in 2005, as fashion trends continue to favor Bebe’s core strength: feminine fashions.
Niemira said many last-minute buys were gift cards, which consumers typically redeem a week or two after Christmas. He forecast healthy retail sales for much of 2005, stating that retail sales could climb 3 percent over 2004 sales. He said luxury retailers will most likely continue to report strong sales during the beginning of the year but may weaken as fashion moves away from last year’s trends. —Andrew Asch
