ROANOKE TIMES
Copyright (c) 1995, Roanoke Times
DATE: Friday, December 1, 1995 TAG: 9512010034
SECTION: BUSINESS PAGE: B-8 EDITION: METRO
SOURCE: Bloomberg Business News
SPENDING HAS SLOWED as shoppers are faced with high credit card debt, slim wage increases and the prospect of losing their jobs.
Major U.S. retailers reported paltry sales gains for November, raising the likelihood that they will have to slash prices even further to attract holiday shoppers.
That could hurt profits in the most critical time of year for merchants: Additional markdowns and promotions should slice into margins already thinned by discounts.
``At this point, it looks like sticks and charcoal for Christmas,'' said analyst Philip Abbenhaus of Stifel Nicolaus & Co.
The better performers were discounters and department stores that sell merchandise other than apparel, which has been sluggish for several months. November's sales gained 2.6 percent, according to the Bloomberg same-store index. While that's an increase over October's 0.5 percent gain, it's below last November's 3.9 percent rise.
Only retailers with little debt and tight cost controls will eke out profit gains for the fiscal fourth quarter, analysts said.
Department stores and big discounters are expected to post earnings little changed or modestly higher in the quarter, while women's specialty apparel stores are seen posting lower results, retail consultant Kurt Barnard said.
``The fourth quarter will be very disappointing for most retailers,'' Barnard said. If the weather turns warmer, retailers may even face a decline in same-store gains for December.
Spending has slowed as shoppers are faced with high credit card debt, slim wage increases and the prospect of losing their jobs as companies continue to cut staffs.
``There are too many stores and customers who are broke,'' Abbenhaus said.
Retailers, though, caution that it's too early to gain insight into Christmas based on November because consumers generally wait until later in the holiday season to begin their shopping.
Analysts, though, are expecting same-store sales gains of 3 percent for December, less than the gain of 5.2 percent a year ago.
Weather helped a little in November, as cold weather early in the month led consumers to buy coats, boots and sweaters. The gains started to fizzle later in the month as the weather warmed. The day after Thanksgiving gave sales a jolt as consumers flocked to the malls to take advantage of sales, but the traffic thinned considerably the day after.
Here are November results reported by some chains operating stores in Western Virginia. Same-store sales are a measure of a merchant's stores that have operated for at least 12 months and are considered the best measure of sales strength because they don't include store openings, closings or expansions.
nAmerican Eagle Outfitters: reported sales of $34.1 million, up 30 percent from November 1994, with same-store sales up 10.6 percent.
nBombay Co.: $29.6 million, unchanged, down 3 percent.
nCharming Shoppes, parent of Fashion Bug and Fashion Bug Plus stores: $90.2 million, down 11 percent, down 13 percent.
nThe Gap: $396 million, up 19 percent, up 1 percent.
nHill's Department Stores: $240.1 million, up 6.4 percent, down 0.1 percent.
nLechters: $39.8 million, up 5.3 percent, down 4 percent.
nThe Limited Inc.: $695.5 million, up 6 percent, down 3 percent.
nMay Department Stores Co., parent of Hecht's and Payless ShoeSource stores: $1.17 billion, up 8.5 percent, up 1 percent.
nS&K Famous Brands: $11.7 million, up 11 percent, up 6 percent.
nTJX Cos., parent of T.J. Maxx: $467 million, up 36 percent, unchanged.
nWoolworth Corp: $656 million, up 2 percent, down 1.3 percent.
Staff writer Megan Schnabel contributed information to this story.
LENGTH: Medium: 79 lines ILLUSTRATION: PHOTO: STEPHANIE KLEIN-DAVIS/Staff. Ed Pippin and hisby CNB2-year-old daughter, Ellery, shop at T.J. Maxx at Tanglewood Mall on
Friday. Graphic: Chart by AP: Sales of top general retailers. color.