Off-Price Sales Good, Luxury Down in May
Retail sales dropped 4.6 percent in May, according to the International Council of Shopping Centers. Department stores selling luxury goods were particularly hard hit, while off-price retailers selling garments at a deep discount enjoyed good sales.
A handful of retailers also enjoyed good sales in May. Same-store sales increased 13.4 percent for The Buckle, the Nebraska-based mall specialty store. Off-pricer The TJX Companies Inc. reported its same-store sales increased 5 percent. Carol Meyrowitz, the company’s president, said the same-store sales exceeded the company’s expectations. “Our strong value equation continued to resonate with customers and boost customer traffic,” she said in a statement.
However, most retailers reported declines. Discounter Target Corp. reported a same-store-sales decline of 6.1 percent. Luxury department store Saks Inc. declined 27.4 percent. A Saks statement blamed the decline on moving its designer sale to the month of June. (It has typically been held in May.) Zumiez Inc., the mall-based surf and skate store, reported a sales decline of 20.7 percent. Retail analyst Jeffrey Van Sinderen said the drop in Zumiez’s May sales could be blamed on the Washington-based chain’s resolve to sell its fashions at full price, rather than putting them on sale, as many of its competitors have done. Van Sinderen works for B. Riley & Co. in Los Angeles. Leading discount retailer Wal-Mart stopped reporting sales monthly in April. It will report its financial performance quarterly.
There was tough news for Hot Topic, the City of Industry, Calif.–based retailer that had experienced strong sales in the past year but for May reported a decline of 6.4 percent. Van Sinderen said much of its 2008/’09 performance was rooted in being the go-to place for merchandise for the hit 2008 movie “Twilight.” He said Hot Topic’s sales might increase again when “New Moon,” the “Twilight” sequel, is released in November.
For June, the ICSC forecast retail sales will be down by 3 percent to 4 percent. The rest of 2009 could be tough compared with past years, said Jack Kyser, an economist with the Los Angeles County Economic Development Corp. “Christmas could be brighter than last year, but recovery will be very modest,” he said. —Andrew Asch
