ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Friday, June 7, 1996 TAG: 9606070044
SECTION: BUSINESS PAGE: B-5 EDITION: METRO
SOURCE: FROM STAFF AND WIRE REPORTS
National retailers reported healthy increases in May sales, as demand for clothing remained strong and thirst for spring and summer goods kicked in.
But some Southwest Virginia merchants said the sales gains haven't carried over to local and regional retailers.
"Sales have been pretty flat," said Jeff Wendell, owner of John Norman Inc., a men's and women's apparel retailer with three stores in Roanoke. "There's no tie-in to national figures in Roanoke. From what I hear from my customers and other retailers, we're not any different from anybody else."
That's not to say Western Virginia merchants haven't been making sales. At John Norman, men's blazers and women's dresses have been selling quite well. And at Roanoke-based Heironimus department stores, sales of women's sportswear have been increasing, said president Larry Drombetta. His stores' home accessories have been strong for several years.
"But overall, we're not seeing a surge," Wendell said.
Nationally, May was the fourth straight month of robust apparel sales, following two years of sluggish demand.
Also significant is that much of the clothing sold last month was at full price. Retailers are keeping inventory leaner, so they don't have to slash prices as they did in previous months to stay competitive. That indicates healthy profit margins that will boost earnings.
``There's been a tremendous reduction in the number of sales going on and that bodes well for the bottom line,'' said Alan Millstein, publisher of Fashion Network Report.
Consumers say they're buying more clothes because stores are offering more colorful, appealing clothing and because they need to replenish aging wardrobes.
In fact, 45 percent to 48 percent of shoppers say replacing garments that are wearing out is the biggest reason they're shopping lately, said Britt Beemer, chairman of America's Research Group, a behavior research firm that talks to 5,000 or more consumers a week. Beemer said 30 percent of shoppers surveyed say they're driven by the bolder-colored clothes in stores.
And the upturn in clothing sales looks likely to continue.
``Apparel sales are probably going to hold up through fall and winter because of the `replacement mode,''' said Kurt Barnard, president of Barnard's Retail Marketing Report.
Warmer weather means sales of so-called hard goods also were strong in May, especially seasonal items such as air conditioners, fans, and lawn and garden tools.
Sales at home improvement chains such as Lowe's Cos. and Hechinger Co. were stronger than they've been in months, analysts said. Lowe's sales rose 10 percent, and Hechinger's 1 percent.
``That's encouraging because it means the strength is not just locked into apparel,'' said Peter Schaeffer, an analyst at Dillon Read.
Clothing sales especially boosted results at moderate-price department-store chains, such as Sears, which is snatching sales and market share from its rivals by focusing on affordable apparel.
The sales gains at apparel-based chains were strong among those that sell clothing geared toward so-called juniors and Generation X-ers. Analysts said some of the mall-based apparel chains benefited from less competition because of hundreds of recently shuttered Merry-Go-Round and Edison Brother stores.
Even with improved results, though, retailers still face hurdles, such as shoppers who resist paying full price.
Retailers also remain mired in a highly competitive industry, filled with too many stores for a weakened demand. That was reflected in some retailers' results.
Consumer electronics chains reported lower sales. Circuit City Stores Inc. said May's same-store sales fell 6 percent and forecast lower-than-expected earnings for its fiscal first quarter. Tandy Corp., which operates Computer City, Incredible Universe and Radio Shack stores, said sales fell 2 percent.
Here are May results reported by major chains operating stores in Western Virginia. The monthly sales are followed by the percentage of change from May 1995 results, and by the change in same-store sales. The latter is a measure of stores that have operated for at least 12 months. Same-store sales are considered a better indicator of a retailer's performance because they remove the impact of extraordinarily strong sales from opening new outlets.
American Eagle Outfitters: sales of $19.5 million, up 30.5 percent from May 1995, same-store sales up 10.4 percent.
Bombay Co.: $23.4 million, down 1 percent, down 7 percent.
Charming Shoppes, parent of Fashion Bug and Fashion Bug Plus stores: $89.1 million, unchanged, up 10 percent.
Circuit City: $569.8 million, up 13 percent, down 6 percent.
Family Dollar Stores: $158.8 million, up 19.6 percent, up 12.7 percent.
The Gap: $358 million, up 27 percent, up 8 percent.
Heilig-Meyers: $94.9 million, up 12.7 percent, up 2.8 percent.
Hills Department Stores: $111.3 million, down 1.2 percent, down 4.6 percent.
J.C. Penney Co.: $1.39 billion, down 0.9 percent, down 0.8 percent.
Kmart Corp.: $2.67 billion, up 2.7 percent, up 5.4 percent.
Lechters: $27.7 million, up 9.5 percent, up 3 percent.
The Limited Inc.: $630.4 million, up 14 percent, up 6 percent.
Lowe's Cos.: $787.7 million, up 26 percent, up 10 percent.
May Department Stores Co., parent of Hecht's: $826.3 million, up 13.9 percent, up 7.2 percent.
S&K Famous Brands: $10.4 million, up 17 percent, up 9 percent.
Sears, Roebuck and Co.: $2.68 billion, up 12.1 percent, up 10.2 percent.
TJX Cos., parent of T.J. Maxx: $545 million, up 92 percent, up 10 percent.
Wal-Mart Stores: $7.91 billion, up 12.4 percent, up 5 percent.
Woolworth Corp.: $560 million, down 3.3 percent, down 1.8 percent.
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