SAME OLD STORY.
And, oh yeah, the comp-store numbers were just about as believable as the other two stories.
Retailers, face the facts: This jig is almost up. In these heady days of wampum witch hunts, the same-store sales scam is just about over.
One of the great dirty little secrets of retailing -- one employed and enjoyed by retailers from all sides of the highway -- has been coming up with same-store comps: monthly comparisons of how the same group of stores did this month versus a year ago.
As the lesser of all evils -- the least dirty of all of those dirty tricks retailers play -- same-store comps have come to be regarded as the cleanest, most accurate way to judge a retailer's monthly performance.
And to some extent, that's true. If not exactly apples to apples, same-store comps at least gave some indication which way a given retail operation was tilting.
But there are apples and then there are apples. Go to the supermarket and you'll see red ones, green ones, golden ones. Big round apples, little squat apples. To a lot of retailers, it came down to a whole lot of apple sauce.
The really creative retailers came up with all sorts of tricks to make their comps shine. Say they were opening a new 45,000-square-foot big box to replace a 12,000-square-foot earlier-generation store down the road. Or a combo store to replace an existing general merchandise-only unit. To many guys, that became a comp store, the same-store number in the same market.
Or, planning ahead, a retailer decides to open stores late in the month, like on the 27 or 28. A year later, comp numbers compare a store open a full 30 or 31 selling days with one open three or four days. Guess what that does to the numbers?
The cheapest trick a store wanting to goose its comps could do was just to move an event from one month to another. That big anniversary sale? Would anybody really notice if it was the last week of this month versus the first week of the next? To say nothing of the vagaries of the Georgian calendar.
The same folks who brought you chargebacks, markdown math and reverse auctions work on same-store comp scams in their spare time. Kind of like a hobby, one supposes.
And if anyone doubted any of these numbers, they just referred them to their independent outside auditor, Arthur Andersen.
Well, it appears that as with many things in life, timing is everything, so don't be surprised to see some congressional committee, some SEC honcho, some Justice Department undersecretary demanding a cleanup of same-store sales scams.
It may not last very long, and whether it will be an enduring change remains to be seen. But something's got to give.
Which is pretty scary when you think about it. Even with all of these scams going on, Federated and May are still in the red more often than the black. Sears and some of the other boys around town aren't doing much better.
It makes you wonder: How much worse could some comps be if they had to play it straight?
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|Publication:||HFN The Weekly Newspaper for the Home Furnishing Network|
|Article Type:||Brief Article|
|Date:||Aug 19, 2002|
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