Retailers Find Mixed Results for October '06
Retail sales for department stores were up in October, yet sales for many specialty stores went down, according to the New York–based International Conference of Shopping Centers.
Still, October’s overall solid sales suggested that the upcoming holiday season would be good for retailers, according to economic forecasters.
The ICSC’s index of 57 retail chain stores increased 3 percent during October. The performance for department stores was marked by an increase of 6.2 percent, while specialty stores declined 0.2 percent.
Department stores performed well almost across the board. Federated, which operates the national Macy’s and Bloomingdale’s chains, reported a same-store sales increase of 7.7 percent. Luxury store Nordstrom reported a 10.7 percent comparable- store sales increase. Long-suffering Fresno-based department store chain Gottschalks, which is reportedly seeking a buyer or merger partner, also reported a solid 1.4 percent increase in same-store sales during October.
The specialty sector had many success stories, such as Brisbane, Calif.–based Bebe. Its same-store sales increased 8.2 percent. But many companies stumbled, including Anaheim, Calif.–based Pacific Sunwear, which reported a decline in same-store sales of 7.1 percent.
October was also disappointing to City of Industry, Calif.–based Hot Topic. The retailer’s goth-friendly fashions have made Halloween one of its most important seasons. But it reported a decline of 7.2 percent in its same-store sales during this crucial month.
Retail analyst Jeffrey Van Sinderen said that there were encouraging signs in Hot Topic’s October performance. Its 2006 Halloween sales were better managed than in the previous year, according to the retail analyst. Inventory was kept low, and it held fewer Halloween promotions than it did in 2005.
However, some of Hot Topic’s other merchandise categories were still suffering. Same-store sales for Hot Topic’s women’s fashions business declined 14 percent. Van Sinderen, who works for Los Angeles–based B. Riley & Co., said he thought that Hot Topic will improve, but it will take time. “It’s a turnaround in transition. Until they see improvements of all of its businesses together, you’re going to see negative comps,” he said.
As for the upcoming holiday season, which traditionally starts on the day after Thanksgiving, the ICSC forecasted a sales gain of 3.5 percent for November and December. The National Retailers Federation surveyed consumers and found that the average consumer plans to spend $791.10 this holiday season, up from $738.11 last year, according to a survey that the Washington, D.C.–based organization published on Oct. 17.
—Andrew Asch
