California Apparel News

The 2009 holiday retail season started on a weak note with U.S chain-store sales declining 0.3 percent in November compared with the same month in 2008, according to the International Council of Shopping Centers.

However, a slow November will turn into a solid December, according to ICSC chief economist Michael Niemira. The rationale is if many consumers resisted opening their wallets during Black Friday, the traditional November start of the holiday retail season, they’ll be compelled to buy their holiday gifts in December. ICSC forecasts December sales increasing by 3 percent to 4 percent compared with December 2008.

Niemira blamed slow November sales on balmy weather throughout the continental United States. Consumers were not compelled to buy winter clothes during a month of sunshine. Department stores particularly suffered in November. Luxury department store Saks Inc. reported a steep decline in its November same-store sales of 26.1 percent. Saks management said the decline was within its projections and reflected reduced promotional and clearance events during the month.

One bright spot for the department-store scene was the continuing rally of Nordstrom. In November, the Seattle-based department-store chain reported a 2.2 percent increase in same-store sales compared with the same time in the previous year. Nordstrom had been reporting negative same-store sales for more than year, but it changed that trend in October.

Off-price retailers and discounters continued their more than year-long trend of reporting good sales. Retail analyst Todd Slater said discounts were just part of the equation for success in 2009. In a Dec. 3 note, he wrote the key to attracting consumers was offering fashions that were cheap, deep and comfortable. “If it was as cheap and deep as TJ Maxx (+9 percent), Ross Stores (+8 percent), Aeropostale (+7 percent) and Old Navy (+6 percent), it flew out the door.” Slater works for Lazard Capital Markets.

Specialty stores gave mixed performances. San Francisco–based Gap Inc. reported flat same-store sales but also showed a 2 percent increase in its total retail sales for November. City of Industry, Calif.–based Hot Topic experienced a cruel November. Blockbuster movie “New Moon” was released in November, and Hot Topic anticipated high demand for “New Moon” merchandise. However, “New Moon” fever was not enough to offset the retailer’s losses. Hot Topic reported a decline of 11.7 percent in its same-store sales. FBR analyst Adrienne Tennant wrote that “New Moon” sales arrested the deceleration of sales in Hot Topic’s women’s category. However, sales for its other categories remained weak. Two upcoming highly anticipated films might help lift Hot Topic out of its rut next year. The retailer will carry related merchandise for “Alice in Wonderland” and “Eclipse.” Both will be released in 2010.—Andrew Asch