September 11 attacks keep American shoppers at home
10/9/01 3:28 PM ET
By Ellis Mnyandu
NEW YORK, Oct 9 (Reuters) - U.S. department stores and
specialty retailers are set to post a sharp slump in September
same-store sales because the Sept. 11 attacks kept shoppers at
home and left stores shut for fear of more attacks.
But warehouse clubs and discounters -- including Wal-Mart
Stores Inc. (WMT.N) -- are seen posting modest increases in
their September sales from stores open at least a year.
Analysts said on Tuesday that the discounters and warehouse
clubs will be helped by customers continuing to buy staples
such as food, detergents, cosmetics and drugs in the days
following the attacks in New York and Washington. Most
retailers will report September same-store sales on Thursday.
The fallout from Sept. 11 is already evident in a string of
earnings warnings from specialty retailers and department
stores since the attacks.
According to research firm Thomson Financial/First Call,
some 35 retailers have already warned of poor earnings for the
remainder of the year since July. Three of these, including
youth-oriented apparel retailer Abercrombie Fitch (ANF.N),
have revised earnings guidance twice since then.
Ken Perkins, an analyst at First Call said about 13 of the
32 warnings came after Sept. 11, and he expected more to come
on Thursday.
"I think we are in for a very depressed September," Michael
Niemera, an economist at Bank of Tokyo Mitsubishi said.
But even long before the hijacked planes demolished New
York's World Trade Center and damaged the Pentagon, U.S.
department stores and apparel chains were already hurting from
a continuing slowdown in U.S. consumer spending.
Retailers who have cut earnings outlooks, citing the Sept.
11 impact, also include luxury jeweler Tiffany Co. (TIF.N),
Neiman Marcus Group Inc. (NMGa.N) and Men's Wearhouse (MW.N),
whose merchandise includes Calvin Klein, Jean-Paul Gaultier and
Burberry brands.
RISING JOBS CUTS
The retailers' woes have also worsened further as corporate
America sheds thousands of jobs in the wake the attacks. The
airline industry alone has announced staff cuts of more than
100,000 amid worries about air travel safety since Sept. 11.
To some analysts, September same-store sales figures will
also point to a weak holiday selling season because of added
uncertainty about the outcome of U.S. retaliatory strikes the
U.S. launched this week against Afghanistan.
The analysts said shoppers also remain on edge amid fears
the United States may still be a target for further attacks.
"I think we are going to see the worst Christmas we've ever
seen in over a decade," said Diane Swonk, an economist at Bank
One. "There is just so much uncertainty out there which is not
helping sentiment. I think September figures may not even be an
accurate read of where we are headed," she said.
APPAREL HARD-HIT
Abercrombie is expected to report a September same-store
sales drop of 15 percent against a decline of 2 percent a year
earlier. But one of the worst declines is seen from Gap Inc.
(GPS.N), the nation's No. 1 apparel store chain. The Gap is
expected to post a same-store sales drop of 17 percent to 20
percent compared with an 8 percent rise a year ago.
"We believe the month of September continued to be very
promotional for the company and thus expect both traffic and
dollars per-transaction to be significantly negative," Jeffrey
Klinefelter, an analyst at U.S. Bancorp Piper Jaffray said.
May Department Stores Co. (MAY.N), which operates Hecht's
and Lord Taylor, is seen reporting same-store sales decline
of 12 to 14 percent, after a 0.7 percent increase a year ago.
Federated Department Stores Inc. (FD.N) -- parent company
of Macy's and Bloomingdale's -- is seen reporting same-store
sales fell by 15 to 20 percent versus 2.9 percent rise in the
prior year.
But Wal-Mart, the world's largest retailer, is seen posting
September same-store sales on plan, up 4 to 6 percent against a
4.2 percent rise in 2000.
"Wal-Mart should stand out as one of the few retailers to
deliver on-plan results in September, helped by its deep
penetration of food and consumables," said J.P. Morgan analyst
Shari Eberts in a research note.
Warehouse clubs -- where shoppers can buy cheaply and in
bulk -- are also seen faring better, with BJ's Wholesale Club
Inc. (BJ.N) expected to report a same-store sales increase in
the 2 percent range compared with a 5.9-percent rise a year
ago. Costco Wholesale Corp. (COST.O) is expected to report
same-store sales growth of 2 to 4 percent after a 7-percent
rise last year
REUTERS |
