Cold Weather, Promotions Animate November '07 Sales

November’s cold snap benefited apparel sales across the United States, but analysts questioned if the cold weather will be enough to guarantee a thriving holiday season.

According to the New York–based International Council of Shopping Centers, chainstore sales increased a healthy 3.5 percent compared with sales of the same time in the previous year.

The cold weather encouraged consumers to shop for winter clothes that may have been sitting on store shelves since September. The month also benefited from a calendar shift. There was one full week of November shopping after the Thanksgiving holiday. In 2006, Thanksgiving fell at the last few days of the month, so there were no extra shopping days on that calendar. The ICSC estimated that the extra shopping days may have inflated November 2007 sales by 0.75 percent to 1 percent. Also, heavily advertised Black Friday promotions contributed to big post-Thanksgiving sales.

Retail analyst Jeffrey Van Sinderen, who works for Los Angeles–based B. Riley & Co., said Black Friday sales saved November from being a tepid sales month. But the heavy promotions could exact a cost, he said. “The high level of promotions and markdowns hurt margins. It appears that sales faded sharply for many apparel retailers after the Black Friday weekend,” Van Sinderen said.

Cold weather and promotions helped usher in a great November at Macy’s. Same-store sales for the department store increased 13.4 percent, which is among its best performances since its Chief Executive Terry Lundgren executed an ambitious consolidation plan in 2005. However, Macy’s forecasted its December same-store sales to fall 4 percent to 7 percent below the previous year’s numbers.

Luxury store Saks also enjoyed a great November. Its same-store sales skyrocketed 25.7 percent.

For the crucial holiday month of December, retailers are taking a cautious outlook because of continued concerns of high fuel costs and the continued pain from the credit crisis, said Christine Chen, a retail analyst for San Francisco–based Needham & Co. She forecasted that the month’s big winners will be teen and luxury clothing stores.

The ICSC forecasted that December sales will increase 1.5 percent compared with the same time in the previous year. —Andrew Asch