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Weather warms retail sales
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April 9, 1998: 12:03 p.m. ET
Soaring mercury, spring cleaning in March cheer chain stores; Gap surges
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NEW YORK (CNNfn) - An extra Easter shopping day and an unseasonable heat spell in many areas of the country last month sent consumers scurrying for garden tools and T-shirts, and well-positioned retailers scrambling for the cash register.
Retailers reported their second straight month of robust sales in March, with casual wear and home furnishings generally outperforming other merchandise as shoppers brought a sprightlier, springier attitude to the aisles of their local malls.
The news came in a raft of same-store reports issued Thursday. The monthly figures measure sales at stores that have been open for more than one year. They exclude stores that opened in the past month or have recently closed, where sales tend to be slightly higher.
"Easter is the reminder that spring is here," said Peter Schaeffer, a retail analyst with SBC Warburg Dillon Read. "This year we didn't get Easter to do that, we got warm weather to do that."
Among the nation's major discount chains, first-ranked Wal-Mart Stores Inc. reported a 6.2 percent increase in same-store March sales, while number-three Sears, Roebuck & Co. posted a 4.7 percent rise in comparable store sales. Wal-Mart owns 1,911 brand-name stores, 454 Supercenters and 444 Sam's Clubs in the United States.
Alone among the trio of top discounters, Kmart Corp. posted a 1.2 percent decline in sales at its United States stores for the five-week period ended April 1. Kmart blamed the slump on "the later Easter holiday," which falls after the reporting period.
Nonetheless, Kmart, echoing a common refrain, said it already has seen an upturn in comparable-store sales in the first week of April, fueled by weather-related purchases.
"Despite the soft overall March performance, we saw gains in selected areas such as home related products and apparel which were affected by favorable weather and improved merchandise offerings," said Floyd Hall, Kmart's chairman, president and chief executive officer.
Not all retailers reaped the rewards of the spring buying bonanza. AnnTaylor Stores and Talbots, both sellers of women's apparel, shoes and accessories, were notable exceptions.
AnnTaylor's same-store sales dip of 7.5 percent made it one of the biggest losers of the day. Talbots sales declined 5.9 percent. AnnTaylor officials attributed the drop to the later Easter holiday and the deferral of a midseason sale, which was moved back one week from last year.
AnnTaylor has been having trouble selling its women's apparel, though company officials insist that the chain is due for a reversal of fortune shortly.
Stores like the Gap and The Limited Inc., which "don't dwell on dressier merchandise," as Schaeffer put it, tended to see sharp gains in their bottom lines. Gap reported a 10 percent rise in same-store sales, ahead of The Limited's 4 percent spurt.
Dillard's Inc., which operates a regional group of traditional department stores, saw a 2 percent sales hike, while Federated Department Stores, with annual sales of more than $15 billion, posted a 0.9 percent increase. Federated's department stores include Bloomingdale's, The Bon Marche, Burdine's, Goldsmith's, Lazarus, Macy's, Rich's and Stern's.
A few stores specializing in casual apparel posted especially strong gains. Among the standouts: American Eagle Outfitters, a retailer of men's and women's casual lifestyle apparel, 42 percent; The Buckle Inc., 20 percent; and B.J. Wholesale, 8 percent.
Similarly, home furnishing outlets like Pier 1 Imports, whose comparable sales rose 10.8 percent, profited handsomely from the premature spring. But Pier 1 warned that sales growth may slide into single digits in April, due to the pushed-back Easter holiday.
In past years, the Easter holiday has provided a boon to retailers as consumers stocked up on dressy clothing for family gatherings and gifts. Those habits are changing, though, according to analysts, with consumers placing less emphasis on a single holiday.
This, in turn, has pressured retailers into a pattern of almost year-round deep discounts, complemented by heavy promotional campaigns that have nudged sales while hitting profit margins.
Retailers may get a lift this year, however, from the devaluation of Asian currencies, which makes imports more affordable.
-- By staff writer Douglas Herbert
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