December '01 Sales Not a Total Bust
The profit picture may look bleak, but a number of retailers managed to eke out better-than-expected sales in December thanks to a shopping rally in the final stretch of the month. Consumers opened their wallets to spend primarily at discounters, drugstore chains and furniture stores, while department stores and specialty retailers, including Federated Department Stores Inc., Limited Inc. and Gap Inc., continued to struggle. And analysts say the discounting will continue, as shoppers remain skittish about job security and the economic situation.
Wal-Mart Stores Inc. beat its own forecast with an 8.0 percent gain in same-store sales. Big sellers were toys, fabrics, food, housewares and apparel in the last two weeks of the month due to cooler weather. Not all discounters shared in the celebration, however. According to recent analyst reports, the nation’s No. 2 discounter, Kmart Corp., which reported a 1.0 percent decrease in same-store sales, is expected to shutter a number of its 2,100 stores in an effort to stay more competitive with Wal-Mart.
Many department stores and specialty retailers felt the heat as consumers never found the must-have item of the season. Dillard’s Inc. posted a 4.0 percent same-store sales loss, and May Department Stores Co. suffered an 8.9 percent fall. J.C. Penney Co. Inc., long a laggard in the moderately priced sector, beat estimates with a 5.4 percent same-store sales increase.
Both Federated and Gap fared better than anticipated. Federated, parent of Macy’s and Bloomingdale’s, reported a same-store sales decrease of 8.6 percent. Gap, which also owns Old Navy and Banana Republic, narrowed its sales losses with a same-store sales decline of 11.0 percent compared to last month’s slump of 25.0 percent, citing strength in denim, in the Old Navy division and at its GapKids division. Another retail surprise was the 4.1 percent sales gain of Pacific Sunwear of California Inc. The skate and surfwear retailer reported strong results in shoes, girls’ clothing and accessories. —Nola Sarkisian-Miller
