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Tough January Showed Bright Spots
Extreme weather made the traditionally low sales month of January even tougher for retailers. However, businesses rallied, said the International Council of Shopping Centers, and sales increased 3.5 percent, according to its tally of comparable-store sales.
“Comparable-store sales posted a moderate gain in January—in line with its prior-month performance,” said Michael Niemira. ICSC’s chief economist.
Other analysts seemed less confident about January’s performance. Adrienne Tennant of Janney Capital Markets said the comparable-store sales of most of the retailers that she followed were below expectations because extreme weather across much of America kept people from shopping and big sales and promotions hurt margins. The next month wouldn’t be that much better, she said. “We believe the consumer malaise experience in January will continue into February,” she wrote in a Feb. 6 research note.
Some retailers reported good performances during January. L Brands, the parent company of Victoria’s Secret, posted a 9 percent same-store-sales increase. Gap Inc. reported a 1 percent increase in its same-store sales for January. “We’re pleased to deliver a strong finish to the year,” said Glenn Murphy, Gap’s chairman and chief executive officer, “with another month and quarter of comp-sales growth.”
January was particularly tough for retailers who serve juniors and young adults. The Buckle Inc. reported a same-store-sales decline of 6.6 percent, and Zumiez Inc. posted a decline of 7.6 percent in January. The Wet Seal Inc. announced results Feb. 6 for its fiscal fourth quarter. Same-store sales declined 16.5 percent for the quarter. Its total net sales were $124.8 million.
Wet Seal Chief Executive Officer John Goodman said that the decline was greater than expected. “We had a difficult fourth quarter, marked by ongoing softness in mall traffic, a highly promotional environment throughout the teen sector and elements of our assortments that did not resonate as well as we anticipated with our customers,” he said.
The January gloom will be broken by stronger business in the rest of 2014. During a Feb. 6 conference call, the National Retail Federation forecast retail sales will climb 4.1 percent compared with the 3.7 percent growth of 2013.
“Measured improvements in economic growth combined with positive expectations for continued consumer spending will put the retail industry in a relatively good place in 2014,” NRF President and Chief Executive Officer Matthew Shay said.
During the conference call, Jack Kleinhenz, NRF chief economist, said retailers should expect difficulties during the year. “2014 won’t be any less challenging, but we will see more strength,” he said.
