Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, June 3, 1994 TAG: 9406030101
SECTION: BUSINESS PAGE: B-4 EDITION: METRO
SOURCE: Staff and wire reports
DATELINE: LENGTH: Long
William Mel Hughes, an analyst at Stein, Roe & Farnham in Chicago, said merchants with a heavy concentration of women's apparel tended to fare worse than stores selling durables or "hard" goods.
For instance, same-store sales at women's retailer The Limited dropped 8 percent. Sales at The Gap, which offers both men's and women's clothes, rose only 1 percent. Same-store, or comparable-store, sales measure results among stores operating at least a full year.
"The question is: To what extent does this signal slower consumer spending?" Hughes said. "The answer is the jury is still out. ... If the economy were a factor in slower apparel sales you'd think it would have more of an impact on durable goods."
Unseasonably cool weather in many parts of the country, including the Midwest and the East, could have limited interest in spring and summer clothing, he said.
Women's styles also seem to be at a low point in the fashion cycle, apparently not attractive enough to spur much consumer interest, he said.
On the other hand, the cyclical nature of women's apparel may make it a good indicator of consumer confidence, said David Kelly, senior economist at Lehman Bros. Global Economics in Boston.
"Women's clothing tends to be more cyclical than men's apparel" and often reacts more to underlying fundamental factors, Kelly said.
A disappointing 4.7 percent rise in sales at Wal-Mart Stores, a perennial heavyweight in same-store sales growth, also could indicate weakening consumer confidence, Kelly said.
"Even a company as well run as Wal-Mart, given its size, cannot chug out the sort of same-store sales increases it has in years past," he said.
Analysts said Wal-Mart's mediocre increase was the biggest surprise among sales reported. Wal-Mart is the nation's largest retailer.
Weak sales had been expected. Among recent indicators, the Johnson Redbook Service on Tuesday reported that its weekly retailer sales surveys showed a 2.6 percent drop in May sales compared with April. TeleCheck Services, which measures retail sales paid by check, said Thursday that May sales rose just 0.9 percent from last year.
For some retailers, May's reporting period included one fewer Saturday this year compared with 1993, a factor that may have cost it about 2 percentage points in overall monthly sales.
Otherwise sales appeared mixed, with J.C. Penney's 5 percent gain mostly in line with expectations and Sears Merchandise continuing to post strong same-store sales growth after closing its catalog outlets last year.
"Overall it seems sales were weak in the beginning of the month and seemed to be improving," said Catherine Cooper, retailing analyst at Kemper Financial Services.
Apparel sales probably will pick up in the back-to-school period, she added.
May results for some other retailers with stores in Western Virginia were:
The Bombay Co. had sales of $30.1 million, up 39 percent overall and 23 percent at comparable stores.
The Cato Corp. had sales of $35.4 million, an increase of 12 percent. On a comparable-store basis, sales decreased 0.6 percent for the period, following a 14 percent comparable-store increase for May 1993.
Charming Shoppes, which owns Fashion Bug and Fashion Bug Plus, had sales of $103.5 million, down 3 percent for all stores and 10 percent at comparable stores.
The Dollar General Corp. had sales of $97.7 million, a 22.2 percent increase; same-store sales were up 9.1 percent.
Heilig-Meyers Co. had sales increase to $66.1 million, up 41.4 percent overall, 7.6 percent at comparable stores.
Hills Stores Co. had total sales for May of $111.2 million, an increase of 0.1 percent for all stores, but an increase of 1.3 percent at comparable stores.
Kmart Corp. had a sales increase of 1.9 percent to $2.72 billion; comparable store sales were down 2.5 percent.
Lechters had sales of $23.8 million, up 17 percent overall and 2 percent at comparable stores.
Lowe's Cos. Inc. reported sales of $511.9 million, an increase of 33 percent overall and 12 percent in comparable stores.
May Department Stores Co., which owns Hecht's and Payless ShoeSource, reported that sales increased 4.5 percent to $854.4 million. Same-store sales were up 1.1 percent.
J.C.Penney Co. Inc. reported sales increased 6.8 percent, including catalog sales. Store sales increased 5.5 percent overall and 5 percent at comparable stores. Sales were $1.328 million.
Sears Merchandise Group reported sales of $2.43 billion, up 7.9 percent for all stores and 8.8 percent at comparable stores.
Woolworth Corp. said domestic sales rose 1.7 percent, but comparable store sales dropped 0.5 percent.
by CNB