Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, November 5, 1993 TAG: 9311050131
SECTION: BUSINESS PAGE: A-11 EDITION: METRO
SOURCE: Associated Press
DATELINE: LENGTH: Medium
Sales for October, historically a barometer of how holiday retailing will go, showed that discounters such as Wal-Mart likely will do well, but department stores and apparel retailers such as Limited and the Gap could face difficulties.
It also may be a season of big price markdowns, good news for shoppers in search of bargains.
The disappointing October results posted by some retailers seem to counter other economic indicators that suggest consumers are spending more and the economy is improving. Consumers indeed are buying cars and other necessities, but they've put off purchasing discretionary items such as clothes.
"The Christmas season is going to be affected by the consumer's unwillingness to spend, his continued concern for employment and meeting his budget," said Walter Loeb, a retail consultant and analyst who called October's figures disappointing.
It's now considered unlikely the retailing industry will see a repeat of last year's strong holiday season, which followed three annual disappointing holiday periods.
Many industry watchers think euphoria after the presidential election aroused a consumer splurge last Christmas, but the realities of more job cuts and the uncertainties of health care reform burst that bubble in 1993.
Loeb forecast an overall Christmas sales increase of 5 percent to 6 percent, versus 8.5 percent a year ago. That's a good showing, but many retailers will be hard-pressed to come up with sales figures that high.
"Consumers are more fickle than ever. They're looking to get as much as they can for their money," said Janet Mangano, an analyst with Burnham Securities Inc.
Edward Johnson, an analyst with Johnson Redbook Service, said many stores will be forced to slash prices in December to lure shoppers.
Markdowns already are included in retailers' sales plans, but if they are not enough to bring consumers in, steeper discounts may be necessary. That could erode retailers' profits at the season when they hope to make half their annual earnings.
Chains operating stores in Western Virginia reported these results:
\ Charming Shoppes Inc., which operates Fashion Bug and Fashion Bug Plus stores, saw sales rise 9 percent to $92.5 million. Sales for comparable stores increased 1 percent.
\ Circuit City Stores Inc. reported October sales of $306.9 million, up 29 percent overall and 6 percent in comparable stores.
\ Dayton Hudson Corp., operator of B. Dalton Bookseller stores, said same-store sales fell 0.7 percent while overall business was up 5.3 percent. The company said it was disappointed by its results.
\ The Dress Barn Inc. reported sales of $119.7 million, up 14 percent. Comparable-store sales were flat.
\ May Department Stores Co., parent of the Hecht's chain and Payless ShoeSource stores, reported a 5.8 percent same-store sales gain and a 9.2 percent overall increase.
\ Limited Inc., reported same-store sales unchanged while overall business fell 3 percent.
\ Woolworth Corp., which on Oct. 13 announced a repositioning program that included closing many Woolworth stores, reported comparable-store sales up only 0.9 percent, while overall domestic sales fell 12.6 percent to $632 million.
Staff writer Sandra Brown Kelly contributed to this story.
by CNB