ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Friday, November 8, 1996 TAG: 9611080057
SECTION: BUSINESS PAGE: A12 EDITION: METRO
DATELINE: NEW YORK
SOURCE: BLOOMBERG BUSINESS NEWS
Shoppers' renewed interest in clothing could mean retailers won't see a repeat of last year's holiday season, one of their worst in decades.
Demand for clothing and designer fashions sent October retail sales up the most since May and offset declining sales of stereos and other electronics, major chains reported Thursday.
Sales at stores open at least a year rose 4.9 percent, according to Bloomberg's industry index. The higher sales bode well for apparel chains like Limited Inc., which is already predicting better-than-expected third-quarter earnings.
``Last year, hard goods like computers and electronics carried the retail industry,'' said Jay Meltzer, an analyst with LJR Redbook Research. ``This year the fashion is better, people need clothes and they are buying apparel.''
Clothing sales have picked up as retailers offer more attractive fashions, especially the updated classics by designers such as Tommy Hilfiger and Calvin Klein.
A relatively strong economy also points toward a strong holiday selling season, with Americans earning more and consumer confidence hovering near a six-year high. One potential problem is that consumers are saving rather than spending.
Same-store sales - which measure activity only in stores open for at least a full year - are considered the best measure for gauging a retailer's sales strength because the figure doesn't include the effects of recent store openings, closings and expansions, which can boost the results. The 0.5 percent increase in same-store sales last October started a swoon that continued through the winter. Last month, department store chains had the best same-store results, an increase of 6.8 percent, the most since January 1995.
J.C. Penney led the pack with a same-store gain of 13 percent. Sears, Roebuck & Co. reported a 5.3 percent increase in domestic same-store sales.
Among the chains specializing in apparel, off-price retailer Ross Stores Inc. fared best with a 17 percent gain. TJX Cos., which operates T.J. Maxx, gained 9 percent.
Intimate Brands Inc., which operates the Victoria's Secret chain, reported a gain of 10 percent. Sales at Gap Inc. rose 4 percent.
Retailers that sell electronics fared the worst.
Tandy Corp., which operates the Radio Shack and Computer City chains, said sales fell 10 percent.
``I think toys and appliances are going to do all right, but in electronics - mostly audio and video - there is not much new,'' said Annie Erner, an analyst with UBS Securities. ``And what is new, like DVD, is not coming out 'til after Christmas.'' DVD, or digital video disks, can put a whole movie on a small disk.
Part of the same-store sales decline for consumer electronics retailers is the because of last year's introduction of Microsoft Corp.'s Windows 95 software, which spurred sales of PCs and other gadgets.
Here is a sample of October's results for chains operating stores in Western Virginia:
* Bombay Co., overall sales rose 5 percent, to $24.5 million in October but same store sales were off 4 percent from a year ago.
* Charming Shoppes Inc., which operates the Fashion Bug chain, had sales of $74.1 million, down 17 percent and same-store sales fell 5 percent.
* Circuit City increased 4 percent, to $550 million, but saw same-story sales drop 9 percent.
* Dress Barn had increases of 10 percent, to $50.3 million, and a gain of 8 percent at comparable stores.
* Family Dollar Stores sales increased 28.4 percent overall to $153.8 million, up 21.4 percent at comparable stores.
* Hills Department Stores gained 4.6 percent, to $153.1 million, up 2.6 percent at comparable stores.
* Lowe's sales jumped 22 percent, for a total of $671.9 million and an increase of 10 percent at comparable stores.
Staff writer Sandra Brown Kelly contributed to this report.
LENGTH: Medium: 78 lines ILLUSTRATION: GRAPHIC: chart - Sales of top general retailers APby CNB