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Retail sales rise in fall
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November 6, 1997: 11:23 a.m. ET
Onset of cooler weather, consumer confidence helps retail sales rebound
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NEW YORK (CNNfn) - Major retailers reported rebounding sales in October, helped by colder weather, after weaker sales the month before.
Discount retailers appeared to fare the best. Wal-Mart Stores, Inc. (WMT), the nation's largest retailer, said its same-store sales for October rose 6.0 percent.
Same-store sales measure purchases at stores open more than one year and are the standard barometer of retail results.
Kmart Corp. (KM) also announced stronger results. Its same-store sales pushed ahead 4.9 percent.
The overall better October results were good news for retailers disappointed by September's lackluster showing after booming August figures.
Despite such volatility, retail analyst Dana Telsey of Bear Stearns said strong consumer confidence and low unemployment should bode well for retailers going into the important Christmas season.
The only looming obstacle could be credit. "Bad debt expense for most [retailers] has not trended downward." said Telsey, thereby eating into earnings results
Telsey said that home decoration accessories would benefit the most from current trends, and higher sales at Pier One Imports Inc. seemed to back up her analysis.
Pier One (PIR) said Thursday its same-store sales surged 17.3 percent in October to $73 million. The specialty retailer of imported home decorations also said it looked for a cheery Christmas season.
However, retailers may not feel very merry until midnight on Christmas eve, according to Kurt Barnard, president of Barnard's Retail Market Report.
"Consumers have begun buying closer and closer to need," he said. "If they could go to the stores to buy for Christmas a day before [the holiday], they'd be ecstatic. Christmas has really become a nail biter for a lot of stores."
In the department store category, blue-chip Sears, Roebuck & Co. (S) said its same-store sales edged up just 1.2 percent.
"The performance of our [stores] was offset by weakness in automotive store sales," said CEO Arthur Martinez. "The accelerated conversion of our parts business to the Parts America format significantly reduced sales."
The news was better over at J.C. Penney Co. (JCP), whose same-store sales rose 2.6 percent.
Federated Department Stores, Inc. topped the segment, though. The company -- which operates stores under the names Bloomingdale's, Macy's, Rich's and Stern's -- reported a sales increase of 3 percent .
Federated (FD) credited the onset of colder weather late in the month for its figures, saying it brought in customers looking for its warmer fall clothing offerings.
One store whose October sales were anything but fashionable was AnnTaylor (ANN). The upscale women's clothing retailer said its sales fell off 13.6 percent in a continuation of its slump in September.
-- by staff writer Randy Schultz
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