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SOFT NUMBERS FROM DEPARTMENT STORES DRAG DOWN FEBRUARY COMPS.

Byline: Michael Rudnick

NEW YORK-Home furnishings retailers logged soft same-store sales in February, partly dragged down by the sluggish department store sector.

Home retailers recorded a 1.3 percent total average same-store sales gain, down 2.2 percent from the prior month and down 1.5 percent from last February.

Of the 22 retailers surveyed, 16 reported increases and six declined. Rite Aid, Havertys Furniture and Big Lots did not report February sales by press time.

Michael Neimira, chief economist and director of research of the International Council of Shopping Centers, said in a statement that February was a volatile sales month, due in part to erratic weather patterns.

Department stores underperformed the sector, recording a 0.3 percent total average same-store sales gain for the month with Saks scraping the bottom with a 6.4 percent same-store sales decline.

Saks blamed its February drop on a reduction in clearance merchandise over the year-ago period at both Saks Fifth Avenue and Saks Department Store Group. The shift of Saks DSG's "Community Days" promotional event to March from February in the prior year negatively impacted sales. At Saks Fifth Avenue, a clearance event which typically occurs in February was instead scheduled for January this year. Furniture sales served as a bright spot at the retailer, as well as outerwear, men's furnishings and shoes.

Pier 1 Imports, which led retailers in January with an 8.2 percent same-store sales increase, fell the hardest in February, logging a 10.8 percent same-store sales decline. "February was a very transitional month for Pier 1 stores following a solid clearance event we believe pulled sales in January. During February, inventories were lean most of the month as stores prepared for new merchandise arrivals," Marvin Girouard, chairman and chief executive officer, said in a statement.

Alan Rifkin, analyst with Lehman Bros., stated in a report that following Pier 1's 15.3 percent same-store sales decrease for February 2005, this "marked the worst two-year comp in the company's history." The report further stated that in addition to the January clearance event pulling sales out of February, Pier 1 faced competition from the second test of Target's Global Bazaar merchandising, which "could have contributed to the necessity for a higher level of promotions in the month."

Girouard is optimistic about Pier 1's anticipated "modern craftsman" merchandise going into March and continuing through the first quarter. "The new merchandise has simpler lines, architectural shapes and, in many cases, larger-scale proportions with sophisticated, fashion-forward color palettes," he added.

Mass merchants and warehouse clubs helped rescue retailers from the red, recording a total average 3.9 percent same-store sales lift. Costco Wholesale Corp. led this group and overall retail with a 7 percent same-store sales gain. Sales in the final quarter were driven in part by major appliances and home furnishings' soft lines.

Target's 4.6 percent same-store sales gain continued to outperform Wal-Mart, which recorded a 3.2 percent same-store sales increase.

Target said its February comps were in line with expectations. Strong performers included electronics, household personal, baby products, perishables and consumables while decorative home, housewares and entertainment weighed down sales. At Wal-Mart, food and consumables continued to outpace general merchandise, the retailer stated.

Same-Store Sales

(% Change from same months in previous year)

FEB. '06; JAN. '06; DEC. '05; NOV. '05; OCT. '05; SEPT. '05

Big Lots: N/A; 6.4; 2.3; 0.7; 1.3; 2.9

BJ's Wholesale: 1.6; 2.0; 1.4; 1.8; 2.9; 3.8

CVS: 5.9; 5.4; 7.3; 7.0; 5.6; 5.7

The Bombay Co.: 4.2; 6.0; -3.5; -12.4; 0.6; -1.6

The Bon-Ton Stores: -1.6; 0.9; 0.8; -0.9; -2.2; -7.8

Costco Wholesale: 7.0; 8.0; 7.0; 6.0; 10.0; 11.0

Dillard's: -2.0; 3.0; 1.0; 1.0; 8.0; -1.0

Dollar General: -0.5; 1.0; -2.8; -0.2; 0.4; 2.5

Family Dollar: 4.4; 3.4; 2.3; 3.4; 3.1; 2.6

Federated: 1.0; 1.0; 3.4; -3.4; -0.7; 1.3

Gottschalks: 2.7; 0.3; 3.7; 0.5; -1.4; -0.5

Haverty Furniture: N/A; -0.1; -0.7; 4.0; 0.6; 6.5

J.C. Penney: 2.3; 2.5; 2.2; 3.6; 2.4; 1.4

Kohl's: N/A; 2.0; 4.6; -0.1; 6.2; -0.2

Neiman Marcus: 3.0; 4.1; 8.6; 4.0; 7.0; 9.6

Pier 1 Imports: -10.8; 8.2; -4.8; 1.9; -10.0; -10.6

Rite Aid: N/A; 0.9; 3.9; 1.1; 1.1; 1.1

Retail Ventures (Value City): 5.6; -0.4; 3.2; 4.7; 6.7; -2.0

Saks: -6.4; 4.3; 2.4; 0.1; 4.6; 3.2

Sam's Club: 3.1; 8.2; 3.6; 7.0; 6.7; 9.8

Stein Mart: -8.5; -0.4; -6.1; -3.6; 1.4; -3.9

Target Corp.: 4.6; 5.2; 4.7; 2.6; 5.7; 5.6

TJX: 1.0; 5.0; 6.0; -1.0; -2.0; 0.0

Walgreen's: 5.7; 7.4; 6.2; 7.8; 6.5; 7.7

Wal-Mart: 3.2; 4.7; 2.2; 4.3; 4.3; 3.8

Average: 1.3; 3.5; 2.4; 1.6; 2.8; 2.0

Source: Company Reports.

*U.S. ONLY AS OF JANUARY

Caption(s): Costco led retailers' same-store sales gains, driven in part by soft home and major appliances. / Pier 1, which logged the greatest same-store sales increase in January, was slammed with a double-digit decline in February.
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Title Annotation:home furnishings industry sales
Comment:SOFT NUMBERS FROM DEPARTMENT STORES DRAG DOWN FEBRUARY COMPS.(home furnishings industry sales)
Author:Rudnick, Michael
Publication:HFN The Weekly Newspaper for the Home Furnishing Network
Geographic Code:1USA
Date:Mar 13, 2006
Words:961
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