May Solid for Fashion Retailers
Retail sales increased 4 percent in May, said Michael Niemira, chief economist for the International Council of Shopping Centers trade group. “The May sales performance was in line with our expectation,” Niemira said. Many fashion retailers reported solid sales results.
Target Corp.’s May sales result of a 4.4 percent increase landed in the high end of its forecast, said Gregg Steinhafel, Target’s chairman. Macy’s Inc. reported a same-store-sales increase of 4.2 percent. Offpricer Ross Stores Inc. reported a comp-sales increase of 8 percent during May.
Gap Inc. reported a same-store sales increase of 2 percent. Janney Capital Markets’ Adrienne Tennant reported that almost every division of the specialty retail giant beat the consensus expectations from independent research group Retail Metrics Inc. For example, the expectation for the Gap North America division was 4.9 percent, but Gap North America reported a 6 percent comp in May. Banana Republic North America’s consensus was 6.2 percent, but the division reported an 8 percent same-store-sales increase.
The only disappointment for the San Francisco–based Gap was a decline at its Old Navy North America division. Retail Metrics forecast it would increase 2.9 percent. However, Old Navy reported a decline of 1 percent. Tennant blamed Old Navy’s decline on the poor traffic driven by Old Navy’s “Pop Kicks” and “Sunstitched Tops” TV ad campaigns, which ran in early May.
Specialty retailers reported mixed sales for May. Surf and skate retailer Zumiez Inc. reported a 13.7 percent increase in May. But The Buckle Inc. posted slight gains of 0.2 percent. Same-store sales for The Wet Seal Inc. declined 8 percent. However, Wet Seal Chief Executive Susan McGalla said the results were in line with the company’s expectations.
“At Wet Seal, down-trending fashion knit tops and screen-tee businesses overshadowed growth in several other categories,” she said. But the retailer will shift its merchandise toward stronger categories—such as jeans, shoes and woven tops—to boost sales.—A.A.
