Retailers report disappointing sales for May
Associated Press
Friday, June 8, 2001
NEW YORK -- After experiencing a brief recovery in April, most of the nation's largest retailers fell back into a sales slump in May, stalled by the choppy economy and
rising energy prices.
Even value-oriented retailers suffered, with chains including Target Corp. of Minneapolis and Kohl's Corp. of Menomonee Falls, Wis., releasing results Thursday that fell
below expectations. Apparel retailers, particularly Gap Inc. and AnnTaylor Stores Corp., and the big department store chains fared the worst.
Cool weather in the Northeast and Midwest hurt sales of seasonal merchandise, especially clothes and outdoor products such as grills and pool accessories. But more
importantly, retailers and analysts said the results clearly showed that consumers, who have been spending cautiously for the past year, continue to pull back.
Analysts were especially concerned about a drop-off in customer traffic at the malls this spring.
Among Twin Cities retailers, Target Corp. said same-store sales increased 0.9 percent for the month ended June 2. (Same-store sales measure results from stores open at
least a year.) Total sales for the nation's fourth-largest retailer increased 6.9 percent to $2.7 billion.
Bob Ulrich, Target's chairman and CEO, said in a news release that sales were "slightly below plan" for the month.
Same-store sales at discounter Target, the company's largest division, increased 1.5 percent, while the chain's overall sales were up 9.2 percent to $2.2 billion.
The company said results from the Midwest were the weakest in the 991-store chain, with lackluster sales in apparel, jewelry and garden merchandise.
Mervyn's, Target Corporation's middle-market department store division, reported an increase in same-store sales of 1.7 percent and an increase in overall sales of 1.5
percent to $299 million. Mervyn's reported its strongest sales in western states.
Target's Marshall Field's department stores continued to struggle last month, as same-store sales declined 6 percent. Overall sales also dipped 6 percent to $185 million.
Men's and children's apparel and home items were among the weakest sellers.
Target's stock closed Thursday at $37.96 per share, up 62 cents.
Wilsons The Leather Experts Inc. said same-store sales decreased 7.8 percent for the month while overall sales surged 58.3 percent to $29.7 million.
The Brooklyn Park-based retailer of leather accessories, outerwear and apparel said the sales increase was driven by results of its travel-related businesses, which were not
included in last year's results.
Joel Waller, chairman and CEO, said in a news release that the company is replenishing merchandise with key early-summer items and that outerwear is well-positioned for
the fall season.
Wilsons' stock closed unchanged Thursday at $18.01 per share.
Christopher & Banks Corp., formerly Braun's Fashions Corp., said same-store sales for the month were flat. Total sales rose 26 percent to $18.3 million.
Bill Prange, chairman and CEO, said in a news release that sales were impacted by unseasonably cool and rainy weather in many of the company's markets. Despite the
monthly results, Prange said he is confident that the company can achieve same-store sales increases in the mid-single digits for the balance of the year.
The Plymouth-based company is expected to open more than 80 stores during the year; it opened 43 new stores during the first quarter, which ended June 2.
Christopher & Banks' stock closed Thursday at $38.31 per share, down 64 cents.
Kohl's Corp. said same-store sales for the month increased 2.1 percent, while total sales increased 17.6 percent to $477 million.
Kohl's stock closed Thursday at $61.83 per share, up $1.24.
"It's disappointing across the board," said Michael Niemira, vice president of the Bank of Tokyo-Mitsubishi Ltd. His company's index of sales for 78 retail chains was up only
1.6 percent last month from May 2000, when the index gained 5 percent.
Niemira originally projected a 3 percent gain, but revised the figure to 2 percent in mid-May.
Niemira currently is projecting no growth in retail sales for the second half. He and other analysts noted that while consumers still are buying, they are choosing lower-priced
goods.
"Value is back in and wholesale clubs are strong," Niemira said.
Costco Wholesale Clubs, for example, registered a better-than-expected 6 percent same-store gain.
-- Staff writer Janet Moore contributed to this report.
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