September '06 Switch: Temperatures Down, Sales Up
Cold weather and steady growth made for a surprising September.
As statistics go, September showed steady retail growth of 3.8 percent, according to New York–based International Council of Shopping Centers (ICSC).
Weather Trends International said that the past month was the 25th coldest September in 112 years. Consumers wanted to cover up and head to department stores to stock up on coats and sweaters. The move was a shift from recent years, when department stores’ sales lagged while specialty stores climbed.
But in September, the department stores sector reported a performance of 8.4 percent, its best performance since January 1997, which was 9.2 percent according to the ICSC.
High-performing department stores such as Nordstrom and Neiman Marcus reported high same-store sales, 13.4 percent and 7.9 percent respectively. Long-suffering stores such as Saks and Fresno, Calif.–based Gottschalk’s reported positive same-store sales of 10 percent and 1.0 percent respectively.
Retail analyst Jeffrey Van Sinderen said he believes that this September’s performance could announce the return of strong health to the department store sector. “After having a very tough time, they’ve undergone metamorphoses. Department stores are getting updated. They look a lot better.” Van Sinderen works for B.Riley & Co. in Los Angeles.
Federated reported same-store sales of 6.2 percent, which was higher than the store’s forecast for September, a comp increase of 3 to 5 percent.
In a company statement, Federated chairman Terry J. Lundgren said that consumers embraced the highly anticipated re-launch of the Macy’s brand in September. “Increased national marketing support led to better-than-expected results,” he said.
Specialty stores posted mixed results. Some were clear winners. Brisbane, Calif.–based Bebe reported a 15.3 percent increase in its same-store sales. However, City of Industry, Calif.–based Hot Topic and Anaheim, Calif.–based Pacific Sunwear posted declining store sales in September of -7.3 percent and -2.4 percent respectively.
Van Sinderen said Pacific Sunwear could change its performance since chief executive Seth Johnson left the company on Sept. 29. “The buck stopped with Seth,” Van Sinderen said. “The execution of the company’s business was poor. But business can improve if the day-to-day operations get better.” —Andrew Asch
