June '06 Brings Sunny Results for Retailers
Many retailers avoided the traditional June gloom, reporting increases in comparable-store sales particularly in the luxury and specialty-store sectors.
Apparel retail sales increased 0.6 percent and chain-store sales rose by 2.6 percent in June, according to an index of 56 chain stores kept by the International Council of Shopping Centers (ICSC), based in New York City.
The steady sales increases seemed to forecast a season of good summer sales, said Jack Kyser, chief economist of the Los Angeles County Economic Development Corp. “The economy is in good shape. But people fret about the slowdown in the housing market, how interest rates have increased and how the price of fuel has gone up,” Kyser said. “The idea is that if the economy has slowed down, people stop buying cars. But they still need to amuse themselves. Soft goods typically are the answer.”
According to the ICSC, luxury chain stores reported the best retail performance on its June index. These stores had an increase of 4.8 percent. Dallas-based Neiman Marcus posted some of the best results of the luxury set with comparable-store sales of 7.7 percent. Birmingham, Ala.–based Saks Inc. reported good same-stores sales of 4.7 percent. However, its total sales decreased 43.8 percent. The company’s Saks Department Stores division suffered the most, with a total sales decline of 79.2 percent. Same-store sales for its Saks Fifth Avenue Enterprises division increased 1.6 percent.
California specialty-based retailers reported mixed performances. Hayward, Calif.–based Bebe Stores Inc. posted a 3.5 percent increase in its comparable-store sales. San Francisco–based Gap Inc. posted a decline of 6 percent in same-store sales. Gap’s merchandise margins were expected to decline in June, according to a Gap company statement.
Sunnier days could lie ahead for Hot Topic Inc., based in City of Industry, Calif. The goth- and punk-inspired fashion retailer suffered this past year when fashion shifted away from a focus on dark clothes to more romantic styles. Christine Chen, an analyst for San Francisco–based Pacific Growth Equities, believes that the fashion pendulum will swing back. “We expect the popularity of darker and more muted colors to increase,” Chen wrote in a July 6 research note. —Andrew Asch
