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Hard goods help retailers
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March 5, 1998: 12:57 p.m. ET
Apparel sales continue to lag, though Gap proves to be a notable exception
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NEW YORK (CNNfn) - U.S. retailers Thursday reported robust sales for February as housewares and hard goods continued to outperform apparel sales, with one notable exception.
Gap, helped by warmer temperatures fueling interest in the incoming spring line, reported comparable-store sales jumped 14 percent in February. Same-store sales come from units opened over a year.
On the other end of the spectrum, though, was Ann Taylor Stores, which managed to squeeze out a 1.1 percent gain with deep discounting in January. But as a result of depleted inventories and fewer markdowns, February sales plummeted 15.9 percent.
"You also wonder about the reaction to the spring line," said Dana Telsey, specialty retail analyst at Bear Stearns, who noted that management's turnaround plans seem to have failed to materialize. The simpler product lines were brought in six months ago in hopes of re-igniting sales.
"The management hasn't been very visible" prior to this morning, Telsey said. The women's apparel company told investors Thursday that first-quarter results will be in the 10- to 15-cents-a-share range, compared with 21 cents a year earlier.
To be sure, the problems at one specific company aren't indicative of hard times for the industry. Many of the nation's largest retail chains reported upbeat results.
Wal-Mart Stores reported February sales rose 9.8 percent, Kmart recorded a 5.6 percent increase and Sears Roebuck reported sales climbed 4.7 percent.
"This economy is still driven by domestic demand. And domestic demand remains very strong. The underpinnings are very favorable. And while the Asian crisis will slow growth a little bit, it will not derail the expansion," said Larry Chimerine, chief economist at Economic Strategy Institute.
Federated Department Stores, parent company of Macy's and Bloomingdale's, posted a 1.5-percent increase last month. J.C. Penney also saw a minimal gain of 1.1. percent.
Analysts attributed the gains in part to solid demand for hard-line goods as home- improvement products and accessories continued to draw traffic.
As evidence of the trend, Pier 1 reported a 12.8 percent increase in February. In January, its sales rose at a healthy 21.7 percent clip. Even upscale retailer Sharper Image recorded a 6 percent sales gain.
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Wal - Mart
Kmart
Sears
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