Thursday January 8, 08:30 PM
US retailers reveal extent of dismal holiday sales
NEW YORK (AFP) - US retailers revealed Thursday the extent of dismal sales in the crucial year-end holiday shopping season, when wary consumers snapped their wallets shut in the face of a deepening recession.
Sales results for the five weeks through December and into the first days of the new year were shockingly weak, as store after store slashed prices early in the season to try to lure reluctant shoppers.
Bad weather also played a part, with icy winter storms in certain regions of the country keeping would-be buyers stuck at home.
The venerable Macy's department store chain said its sales were 4.7 percent lower in the period from a year ago, and down 4.0 percent on a same-store basis.
Macy's, whose landmark Manhattan store was immortalized in the Christmas holiday movie classic "Miracle on 34th Street," announced it was closing 11 stores nationwide, with a loss of 960 jobs.
The news barely raised an eyebrow.
"Here at the cosmetics stands we do well," said a salesman, "but I know the mall over all does not do so well. They hired 5,000 extra persons for Christmas; they are not keeping them."
Following the store closings announced Thursday, Macy's will operate 848 stores, including 40 under the Bloomingdale's brand.
Other retailers may follow suit and close stores.
"It's going to be ugly. Clearly it's tough for the strong, well-capitalized retailers, so you can imagine what's going on for the weaker players," said Adrianne Shapira, a Goldman Sachs (NYSE: GS - news) retail sector analyst, on business television network CNBC.
December US chain store sales fell by 1.7 percent on a same-store basis from a year ago, and November-December holiday sales were down a steeper 2.2 percent, the International Council of Shopping Centers (ICSC) said.
"This was an extraordinarily difficult holiday season," said Michael Niemira, ICSC chief economist and director of research.
"Retailers were forced to slash prices to entice consumers to spend," he said. "But even that strategy was not enough as the elevated worry about job insecurity and increased job layoff announcements continued to restrain consumers' willingness and ability to spend."
Nordstrom (NYSE: JWN - news) , another department store giant, did better than expected in the seasonal downturn with an 8.0 percent drop in sales and a 10.6 percent decline in same-store sales.
It was the same grim story for JCPenney, which had sales declines of 6.8 percent (8.1 percent in same-store sales), although still less dismal than very dire forecasts.
Sears saw a 7.3 percent drop in comparable sales, with its own medium-priced brand down 12.8 percent and its discount subsidiary Kmart off 1.1 percent.
Clothes retailers were among the worst-hit. The Gap's sales were down 12 percent, or 14 percent in same-store sales. Sales at Abercrombie & Fitch plunged 18 percent (24 percent) and American Eagle Outfitters (NASDAQ: AEOS - news) saw sales down 10 percent (17 percent.
American Apparel was a rare exception, benefiting from its "made in USA" appeal: sales rose 10 percent, and were 3.0 percent higher on a same-store basis.
For the luxury sector, the holiday season was simply horrible.
Saks (NYSE: SKS - news) , which complains that consumers were delaying buying in anticipation of even lower prices, saw its sales plummet 18.9 percent, and 19.8 percent in comparable sales.
Rival Neiman Marcus tumbled 26.4 percent (27.5 percent).
The winners in the budget-conscious season were the low-cost stores, led by discount giant Wal-Mart, where sales excluding gasoline rose 4.3 percent (1.9 percent). But the world's largest retailer also lowered its earnings guidance, citing in part disappointing international sales as the global economy slumps.
Other bargain chains reported sales gains, including Ross (6.0 percent), Kohl's (3.6 percent) and Target (0.2 percent).
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