September '07 Sales Could Lead to More Markdowns
Consistently solid retail performers including Nordstrom slipped during September, and a few retailers such as Pacific Sunwear reported increases during a month that was called disappointing by many retailers.
According to an index of 47 chain stores kept by the New York–based International Conference of Shopping Centers, retail sales increased an anemic 1.7 percent compared with the same time in the previous year.
Many national retailers blamed unseasonably warm weather during September. Many consumers were not interested in buying cold-weather clothes for Fall when the sun was shining, according to many retailers.
Nordstrom’s same-store sales increased 3.2 percent, while its overall September sales were lower than expected, according to Blake Nordstrom, the company’s president. The store was placed in a bad position because its inventory levels were higher than expected. Nordstrom said that the company would take steps “to bring inventory levels in line.” But it would come at a cost. Merchandise margins and earnings would probably decline for its third quarter.
According to retail analyst Jeffrey Van Sinderen, many companies are caught in a similar bind of high inventories and lower sales, and they will probably whittle away at their inventories with markdowns. Fall markdowns could be a harbinger of a holiday season characterized by many sales.
While September disappointed many retailers, others reported good business. Anaheim, Calif.–based Pacific Sunwear spent much of 2007 reporting declines. For September, it reported a 2.7 percent increase. Van Sinderen said that the surf and skate–friendly retailer had been experiencing better sales in its sneaker and footwear program.
September has been a good time for other youth-based retailers. Everett, Wash.–based Zumiez Inc. and Kearney, Neb.–based The Buckle Inc. reported September samestore sales of 13.9 percent and 10.9 percent, respectively. —Andrew Asch
