Retailers post dismal October sales
From staff and wire reports
Published Nov 9 2001
Even with the arrival of Halloween and big discounts at the
stores, consumers stayed away from the nation's malls in
October, worried about the economy and their own safety amid
anthrax scares and terrorist alerts.
As the nation's top merchants reported generally disappointing
sales results Thursday, it was clear that discounters and other
value-oriented stores remain the beneficiaries of consumers'
frugality. Mall-based department stores and apparel chains,
particularly Federated Department Stores Inc., AnnTaylor
Stores Inc., Gap Inc. and Abercrombie & Fitch, continued to
languish.
The news, while not surprising, was painful for retailers looking
for signs of a consumer spending rebound in time for the
holiday season. Consumers cut back sharply after the Sept. 11
terrorist attacks, and haven't fully returned to their previous
spending levels -- which already were depressed because of the
economy.
Target Corp. said same-store sales for the month ended Oct.
28 increased 2 percent. Same-store sales measure results from
stores open at least a year. Overall sales for the
Minneapolis-based retailer increased 8.9 percent to $2.9
billion.
Bob Ulrich, chairman and CEO of Target Corp., said in a
prepared statement that sales were "below plan" reflecting "a
particular weakness" at at the Marshall Field's
department-store chain.
By division, same-store sales at Target discount stores
increased 4.1 percent, while total sales surged 12.8 percent to
$2.3 billion. Target has 1,055 Target and SuperTarget stores
nationwide.
Mervyn's, the retailer's moderate-priced department store
chain, reported a 1 percent decline in same-store sales, while
total sales fell 1.6 percent to $283 million.
Field's reported a whopping 10.1 percent decrease in
same-store sales, and a 10.1 percent dip in total sales of $226
million.
Target's stock closed Thursday at $34.35 per share, up 24 cents.
Wilsons The Leather Experts, the Brooklyn Park-based
specialty retailer, said same-store sales for October dropped 5.3
percent, while total sales surged 21.9 percent to $60.7 million.
The increase in total sales was driven by the addition of the
company's travel-related retail stores, Bentley's and El Portal,
which were not included in last year's results.
Wilsons' stock closed Thursday at $12.34 per share, down 52
cents.
Christopher & Banks
Christopher & Banks Corp., formerly Braun's Fashions Corp.,
said same-store sales for October increased 4 percent for the
five-week period ended Nov. 3. Total sales at the
Plymouth-based specialty retailer jumped 31 percent to $28.1
million.
Christopher & Banks' stock closed Thursday at $34.45 per
share, up $1.10.
Kohl's Corp., the moderate-priced department store chain
based in Menomonee Falls, Wis., said same-store sales in
October rose 13.5 percent. Total sales increased 27.7 percent to
$578 million.
Kohl's stock closed Thursday at $61.31 per share, up 37 cents.
Communities and malls scaled back trick-or-treating events
for security reasons. Consequently, mall traffic tumbled 17
percent on Halloween from a year earlier, according to RCT's
National Retail Traffic Index.
Jeff Feiner, managing director at Lehman Brothers said the
uncertainty after Sept. 11 is affecting shopping patterns.
Volatility a big concern
"The volatility of mall traffic is a big concern. It makes it hard
to predict holiday sales," said Feiner, who reduced his holiday
sales projections three weeks ago to a 2.5 percent gain from 4
percent.
Consumer spending is critical to an economic recovery because
it accounts for about two-thirds of the gross domestic product.
Wal-Mart Stores Inc., which continues to take market share
away from department stores, reported a robust 6.7 percent
gain in same-store sales. That beat the 5.2 percent consensus
forecast of analysts surveyed by Thomson Financial/First Call.
But, Kmart, struggling to emerge from a slump, saw its
same-store sales fall 4.4 percent, worse than the 3.7 percent
decline analysts expected.
Apparel chains and department stores suffered the most. Gap's
same-store sales, dragged down by Old Navy, plummeted 17
percent. The retailer said it was tightly managing its capital
expenditures.
Meanwhile, Abercrombie & Fitch reported a 20 percent
same-store decrease, while AnnTaylor reported that
same-store sales fell 11.8 percent.
While there was a shift away from mall-based businesses
during the month, J.C. Penney Co. Inc. reported a significant
improvement during the past two weeks. Penney's same-store
department stores sales were down 0.7 percent, which met Wall
Street expectations.
-- Star Tribune staff writer Janet Moore contributed to this
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