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Home warm despite a cool Yule.

NEW YORK (FNS) - The Christmas season provided little cheer for retailers, with most reporting disappointing December sales.

The hardest hit were consumer electronics retailers, with most chains forced to use heavy markdowns in the face of a highly competitive climate in computers. Most furniture chains also were sluggish and home improvement chains continued their poor showings.

Department stores outperformed most retail formats, with most reporting moderate same-store gains. Most discounters and off-price stores suffered same-store declines.

The bright spot was home furnishings and domestics retailers led by Pier 1 Imports Inc.'s 16.1 percent same-store leap; and Bed Bath & Beyond's same-store climb of 10.5 percent. Strouds Inc. managed a 1.1 percent same-store gain.

At Lechters Inc., same-store sales rose 2.8 percent, with a 3.9 percent climb at Lechters Housewares offsetting a 2 percent slide at its Famous Brands Outlets chain.

Steen Kanter, Lechters' vice chairman and chief executive, said he was "very encouraged" by December sales, particularly its Lechters Housewares division and its private label merchandise, which includes Cooks, Club, Regent Gallery, and Simple Solutions.

Melville Corp. said its Linens 'n Things chain chalked up a 1.3 percent same-store gain at its superstores. Including its traditional stores, Linens 'n Things sales dipped 0.3 percent.

Furniture retailers all recorded negative same-store sales. Heilig Meyers was down 2.3 percent and Rhodes declined 3.4 percent. Bombay Co.'s same-store sales were off6 percent. Excluding 10 stores which were converted to a large-store format, Bombay's same-store sales slumped 8 percent.

Levitz Furniture's samestore sales skidded 5.2 percent, and the company disclosed a major realignment of its management structure that centralizes all buying, inventory, management and advertising in the company's home office in Boca Raton, Fla. The restructuring will eliminate 65 jobs, including five senior executives.

Meanwhile, consumer electronics chains were hurt by low prices, extensive advertising and expensive credit promotions.

Best Buy Co. said its 3 percent same-store gain was below expectations, but it pointed out that it was able to maintain its market share position during a period of weak consumer demand.

Tandy Corp. said same-store sales moved ahead 2 percent, but downwardly revised its earnings estimate for 1995 because of competitiveness in the retail computer industry during the holiday season and lower-than-expected volumes at its new Computer City and Incredible Universe stores.

John V. Roach, Tandy's chairman and chief executive, said its Radioshack chain performed "exceptionally well" during the season but lackluster computer sales caused both computer city and Incredible Universe to miss sales plans. The company also said it intends to scale back 1996 store openings from 1995 levels by one-third at Computer City and one-half at Incredible Universe.

Ultimate Electronics, where same-store sales fell 12 percent, blamed the sluggish retail environment and new competition. Audio King, with a 5 percent same-store decline, also said Christmas was not as strong as planned, but noted that after-Christmas business was "very strong."

The Good Guys Inc. said same-store sales in its first quarter ended Dec. 31 fell 6 percent. Total sales rose 9 percent to $281.7 million.

One winner was Comp USA, which reported a 10.5 percent same-store sales jump in its second quarter ended Dec. 23. Overall sales climbed 22 percent to $931 million.

Sears was the top performer among department stores with a 6.8 percent same-store gain. Sales were strong across the board, specifically camcorders, TVs, and home irnprovement.

Kmart Corp. said its 5.5 percent same-store gain at its U.S. discount stores was within its sales expectation. Strength in domestics and toys offset weak in apparel. Wal-Mart Stores only managed a 1.1 percent again.

The home improvement sector continued to be sluggish. Hechinger Co. showed a 7 percent same-store decline, and Builders Square, a division of Kmart, was off 7.4 percent. Lowe's Cos. fared better, with same-store sales.
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Title Annotation:home furnishings and domestics stores did better business than related retail fields during December 1995
Author:Ryan, Thomas J.
Publication:HFN The Weekly Newspaper for the Home Furnishing Network
Date:Jan 8, 1996
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