California Apparel News

Retailers reported solid sales during August, but skyrocketing fuel prices slowed down the brisk pace of shopping for much of this year, according to the International Council of Shopping Centers (ICSC) in New York.

The organization’s index of 67 retail chain stores saw an increase of 3.6 percent in August, compared with the same period last year. The index is based on same-store sales and total store sales.

The August performance missed the ICSC’s forecast of a 4 percent increase for the month, said Michael Niemira, the ICSC’s chief economist. He blamed the slackening retail performance on rapidly rising gasoline prices and high temperatures. It was the 11th warmest August on record, according to weather forecaster SDI/WeatherTrends.

However, some sectors did very well despite the tough business atmosphere.

Luxury stores recorded an increase of 7.3 percent on the ICSC index.

But department stores saw an increase of only 2 percent, and apparel chain stores increased just 1.2 percent from their performance in August last year.

The Wet Seal Inc., based in Foothill Ranch, Calif., reported the month’s best same-store sales with 48.3 percent. Analysts applauded the sales as a return to health for the juniors retailer, which suffered through two years of double-digit decreases of same-store sales.

The company started reporting positive comparative-store sales in December 2004, but retail analysts were still trying to gauge the health of the recovery.

“What you’re seeing is a recovery to where business should generally operate,” said Jeffrey Van Sinderen, an analyst with B. Riley & Co. in Los Angeles. “Now they’re back at sea level. What do you do to get it above sea level? What do you do to get people excited about the stores?”

City of Industry, Calif.–based Hot Topic Inc. reported the poorest showing of the month when its same-store sales decreased 7.1 percent. However, the worst should be behind the company, said Kimberly Greenberger, a retail analyst for New York–based Smith Barney Citigroup.

She upgraded the stock to a “buy” on Aug. 31 because of a new license and a new hire. Hot Topic holds the exclusive license to market merchandise for Tim Burton’s new film, “Corpse Bride,” a property that’s expected to be a big seller for the company. Hot Topic also hired a new chief merchandising officer, Maria Comfort, on Aug. 17. Comfort is a 25-year veteran of retailing, having worked at Contempo Casuals as executive vice president of both retail and wholesale operations. She will be responsible for buying, merchandise planning, licensing and marketing for Hot Topic and www.hottopic.com.

California retailers should expect a good September because Back-to-School buying is getting into full swing, said Jack Kyser, the chief economist for the Los Angeles County Economic Development Corp.

“So far, Back-to-School has been good, but it’s been no home run,” Kyser said. “Kids have seen what style leaders are wearing at school, and in this month and in October they’re going to stores to buy the fashions.” —Andrew Asch