2007 Retrospective: Retail Sales
Specialty Chains: Wet Seal, Zumiez
The Wet Seal Inc. has had a tough time in recent years but appears to be making a comeback. The Foothill Ranch, Calif.–based company enjoyed good business for much of 2007—even with a steep dip in March.
By the retailer’s third quarter, which ended Nov. 3, it reported its comparable-store sales declined 3.4 percent compared with the same time last year. The beginning of the 2007 holiday season did not give it much of a boost either. Same-store sales for November declined 1.7 percent compared with the same time last year.
Wet Seal offers trendy juniors fashions at its 405 Wet Seal stores and contemporary clothes for women ages 25 to 35 at its 95 Arden B stores. On Sept. 6, the company hired Edmond Thomas as its new chief executive. He was president of the company from 1992 to 2000. In a Nov. 29 statement, he said the company would attempt to remedy its recent problems by slowing down growth of its new stores in 2008.
Retail analyst Jeffrey Van Sinderen, with Los Angeles– based B. Riley & Associates, applauded Thomas’ statement. Van Sinderen wrote in a Nov. 30 research note that curtailing some growth would allow the retailer to focus on store productivity.
On the flip side, Zumiez Inc. was cheered by many investors during 2007. The Everett, Wash.–based retailer of skate, surf and snow fashions reported double-digit growth for its comparable-store sales for much of the year.
For its third quarter, which ended Nov. 3, its same-store sales grew 13.2 percent compared with an increase of 10.7 percent during the same time last year. It also posted solid sales for the start of its 2007 holiday season. Its same-store sales for November increased 5.6 percent compared with the previous year.
Retail analyst Thomas Filandro, with New York–based Susquehanna Financial Group, wrote in a Nov. 30 research note that he expects the good times to keep rolling for Zumiez. quot;It is important to note that despite the current economic climate and the lack of true winter weather, [Zumiez] remains a classic high-growth specialty concept with 283 stores in operation, 65 percent below management’s fleet target of 800 locations.quot;—Andrew Asch
Department Stores: Nordstrom, Saks
While Nordstrom Inc.’s sales practices, such as its liberal return policy, have long been an inspiration to retailers, the Seattle-based department store experienced a tough year in 2007.
The company has been known for its stellar sales performances. However, it lowered its full-year earnings forecast two times in 2007 to $2.78–$2.82 a share. It also reported an uncommon decline of 2.4 percent in its comparable-stores sales in October. It was the lowest performance in same-store sales since 2002. Nordstrom President Blake Nordstrom said on Oct. 11 that the luxury retailer would take short-term action against its poor sales performance by lowering its inventory levels. But the company is not planning to change its long-term growth plans, which included opening stores in the Boston area and in Hawaii.
The retailer made fashion news this year when it announced that celebrated merchandiser Jeffrey Kalinsky would take an unspecified leadership position in the retailer’s buying department after serving as a part-time consultant. Nordstrom purchased Kalinsky’s influential specialty stores Jeffrey New York and Jeffrey Atlanta in 2005.
Nordstrom also made business news this summer when it sold its Faccedil;onnable subsidiary for $210 million to the M1 Group, with offices in Monaco and Beirut. Nordstrom owned the Faccedil;onnable brand for 19 years but sold it to focus on its core business.
This year, New York–based Saks Inc. was one of the stars of the department-store scene. It reported double-digit comparable-store sales increases for many months of the year. For the third quarter, which ended Nov. 3, comparable-store sales increased 11.4 percent compared with the same period last year.
After Saks Chief Executive Steven Sadove took on the added role of chairman, it was announced that foreign sales would be in the company’s future. On Nov. 28, Saks opened a 150,000-square-foot store in Mexico City. It plans to open another in Shanghai in 2009.
Retail analyst Michael Exstein of Credit Suisse said there was no trend on the horizon to change Saks’ positive outlook.—A.A.
