April '08 Sales Strong

April was the strongest sales month in more than one year, according to the New York–based International Council of Shopping Centers. Retail sales increased by 3.6 percent compared with sales in the previous year.

April’s robust sales took the economy on a roller-coaster ride. The previous month, March, was judged the weakest month for sales since 1995.

Economists and executives credit the stronger sales to warmer weather, which encouraged sales of spring clothes. Also, retailers got an extra Sunday to do business in April. It was due to the Easter calendar shift, when the holiday fell earlier—on March 23—than the previous year.

Despite the stronger sales, the ICSC’s chief economist, Michael Niemira, said business probably would continue to be affected by aftershocks of economic troubles such as the subprime-mortgage meltdown.

March sales proved especially good for discounters and off-pricers. A resurgent Target posted same-store sales of 3.8 percent; it bounced back from a rare decline of 4.4 percent in March. Still, Target Chief Executive Gregg Steinhafel said April’s sales performance was slightly below the retailer’s planned range.

Department stores’ sales performance was more of a mixed bag. Saks Inc. reported a stellar month, with comparable sales skyrocketing 23.9 percent. Gottschalks continued its long run of poor sales, reporting a 3.9 percent decline in April. The Fresno, Calif.–based retailer also recently called off plans to build two smaller-format stores this year.

The smaller-format stores are part of Gottschalks’ plan to turn around its long-suffering sales. Gottschalks’ Chief Executive Jim Famalette said the retailer might build these smaller stores in 2009.

There were winners and losers among the specialty stores, as well. Fort Myers, Fla.–based Chico’s FAS Inc. stumbled in April, reporting a sharp decline of 15.5 percent. Anaheim, Calif.–based Pacific Sunwear reported an April sales increase of 4 percent. In March, the teen retailer reported a decline of 8 percent. Pacific Sunwear is headed in the right direction, according to Roth Capital Partners Retail Analyst Liz Pierce. “Although the environment remains tough, given their California board-sport niche, their teen target customer and their decent price/value product offering, we believe they are well-positioned to ride out the storm,” Pierce wrote in a May 8 research note. —A.A.