May '05 Sales Prove Steady
Unseasonably chilly weather in May cooled consumers’ appetites for shopping. But economists said retailers managed to bring in respectable sales and that economic trends could pave the way to a June marked by good business.
The New York–based International Council of Shopping Centers said chain-store sales grew 2.9 percent in May. These numbers came in below the 3.5 percent growth forecasted by the ICSC’s chief economist, Michael Niemira. But Niemira said he thinks the market was just chugging along, not stumbling.
“We were steadier than numbers might imply,” Niemira said. “There hasn’t been any substantial change in consumers and in appetites for non-automotive retailers. In one sense, these numbers were non-eventful. They did not change underlying perceptions of where strength or weakness was.”
The top retail performers during May continued to be luxury stores such as Dallas-based Neiman Marcus Group Inc., which reported comparable-store sales of 11 percent, and teen-oriented boutiques such asAbercrombie & Fitch Co. The Ohio-based retailer’s comparable-store sales increased 29 percent. Foothill Ranch, Calif.–based The Wet Seal Inc.’s same-store sales skyrocketed 56.9 percent.
Brisbane, Calif.–based Bebe Stores Inc. continued its stellar performance, reporting comparative-store sales of 40.3 percent in May. Sanders Morris Harris retail analyst Liz Pierce wrote in a research note that Bebe shouldn’t have any problems in the near future. “We believe the consistently strong store traffic, the obvious positive customer response to the merchandise and the corresponding increase in inventory sets the stage for sustainable comp growth,” she wrote.
While the majority of specialty stores tracked by the California Apparel News generally did well in May, Gap Inc. stumbled, reporting an 8 percent decrease in its comparative-store sales. Christine Chen, an associate research analyst with San Francisco–based Pacific Growth Equities, said Gap’s decline came from its merchandising mix, which she noted is too fashion-forward for core Gap shoppers and has not attracted the attention of fashion-savvy consumers.
But Chen said that better times are on the horizon for Gap. “They’re going back to their original aesthetic of casual American style,” she said.Warrendale, Pa.–based American Eagle Outfitters Inc. tried a similar strategy for its Spring 2004 collection and pulled out of a two-year slump, according to Chen.
Looking forward to June, Niemira said he expects good weather will stoke consumers’ interest in shopping. He forecast retail sales will climb 3 percent to 4 percent over those of the previous year.
—Andrew Asch
