Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, November 3, 1995 TAG: 9511030064
SECTION: BUSINESS PAGE: B8 EDITION: METRO
SOURCE: ASSOCIATED PRESS
DATELINE: LENGTH: Medium
Sales reports issued by the retailers Thursday made it virtually certain that the upcoming Christmas season will be tough, and very likely disappointing, for many stores.
Yet Wall Street's attitude toward the big merchandisers was upbeat. Some retail stocks rose sharply, a sharp contrast to the declines suffered when the retailers have announced poor sales results in the past.
Investors may be theorizing that things can't get much worse, or that consumers are simply saving their money and will finally spend during the Christmas season, when retailers hope to make half of their annual sales and profits.
Retail industry analysts said persistent warm weather last month hurt apparel retailers, who have struggled for several years as consumers shifted their spending to their homes and children.
But broader issues also are stifling business. The economy and uncertainty about tax legislation pending in Congress are weighing on consumers, who are reluctant to spend on items they don't really need.
Many Americans just don't have enough money.
Real income growth in September was up 3.5 percent - but that was down from 3.9 percent in July, noted Wayne Hood, a retail industry analyst with Prudential Securities Inc. ``Going into the holiday season last year, we had 4.5 percent,'' he said.
The difficult environment and increasing competition likely will force many retailers to mark merchandise down more than expected during the holiday season. Joseph Ronning, an analyst with Brown Brothers Harriman & Co., said going-out-of-business sales will pressure other retailers to reduce their prices.
On the plus side, some retailers who had a bad October are ``flexible and nimble enough to adjust their expenses and inventories for Christmas,'' said Jeffrey Feiner, a retail industry analyst with Salomon Brothers Inc. So, even if sales are weak, these companies' profits shouldn't suffer, he said.
The Salomon Brothers retail index, the investment firm's barometer of sales performance, rose a minuscule 0.4 percent after a 3.3 percent gain in September. In October 1994, the index rose 3.8 percent.
Here are results reported by some chains operating stores in Western Virginia. Same-store sales are considered the best measure of a retailer's sales strength because they don't include store openings, closings or expansions.
American Eagle Outfitters: Sales of $22.8 million, up 27 percent from October 1994, with same-store sales unchanged.
Bombay Co.: $23.06 million, down 4 percent, down 5 percent from October 1994.
Charming Shoppes, parent of Fashion Bug and Fashion Bug Plus stores, $90 million, up 4 percent, up 2 percent from 1994.
Family Dollar Stores, $119.8 million, up 6.6 percent, down 1.1 percent from 1994.
The Gap, $344 million, up 17 percent, up 2 percent from 1994.
Heilig-Meyers, $88.4 million, up 18.5 percent, down 3.7 percent from 1994.
Hills Department Stores, $146.3 million, down 3.9 percent, down 7.8 percent from 1994.
Lechter's, $28.1 million, up 6 percent, down 2.3 percent from 1994.
Limited Inc., $547.1 million, up 2 percent, down 5 percent from 1994.
Lowe's Cos., $551.5 million, up 16 percent, down 1 percent from 1994.
May Department Stores Co., parent of Hecht's and Payless ShoeSource stores, $916.7 million, up 5.5 percent, down 2.6 percent from 1994.
S&K Famous Brands, $10 million, up 12 percent, up 7 percent from 1994.
TJX Cos., parent company of T.J. Maxx stores, $331 million, up 8 percent, down 4 percent from 1994.
Woolworth Co., $551.4 million, up 0.1 percent, down 3.5 percent from 1994.
by CNB