2013 off to a strong start for US retailers
2013 got off to a strong start for US clothing and footwear retailers in January, with many reporting their best performance since September 2011.
Comparable-store sales rose 4.5% over the month, according to figures released by Retail Metrics and the International Council of Shopping Centers.
The better-than-expected results were helped by two extra pre-holiday selling days compared to last year, combined with cool temperatures that helped chains sell through seasonal merchandise, according to Retail Metrics president Ken Perkins.
"Despite worries of a ‘fiscal drag' due to higher payroll taxes, consumers were out shopping for bargains and clearance items," added Michael Niemira, vice president of research and chief economist for the International Council of Shopping Centers (ICSC).
Perkins said that department stores, which were expected to generate the strongest January gains, did not disappoint, "racking up a robust 8.1% increase, which was the largest comp for the group dating back to November 2007."
Indeed, Macy's recorded the biggest monthly sales gain in over five years, with chairman, president and CEO Terry Lundgren describing the month as "outstanding" for Macy's and Bloomingdales.
"Our sales were driven by our strategy to flow-in more fresh fashion goods in December to better serve post-holiday shoppers seeking new and interesting merchandise," he said.
"This exceptional January performance capped our company's third consecutive year of top line sales growth of more than $1bn, which began in 2009 when we restructured Macy's into a national retailer with a local focus. Clearly, our strategies are resonating with customers as they shop in our stores, online and via mobile."
Meanwhile, Michael Glazer, president and CEO of Stage Stores, which recorded a 10.5% rise in comparable sales, said: "January put an exclamation point on a fantastic fourth quarter and year, as the month's strong performance helped push comparable store sales for both periods to their highest levels in over 10 years.
"We achieved solid comparable store sales increases across all of our families of business and in all areas of the country in January."
Gap and Limited Brands also posted high single-digit gains over the month, with comparable sales rising 8% and 9% respectively.
Commenting on the results, Gap Inc chairman and CEO Glenn Murphy said: "We're pleased with the continued momentum in the business across all our brands in North America. As we transition to 2013, our focus remains on delivering compelling product in order to sustain our positive sales performance."
Cato chairman, president and CEO John Cato said the value retailer's results reflect the "difficult retail environment" faced by the group during 2012.
"Sales at the beginning of the month were in line with our year-to-date trend. However, sales at the end of the month were significantly worse than trend," he said.
"We think this was primarily due to the timing of tax refunds and the effect of higher payroll taxes. We are unclear what portion of the sales lost due to tax refund delays will be recouped."
Meanwhile, Wet Seal CEO John Goodman attributed the below-expectations result to comparable store declines in its Wet Seal stores, which were partially offset by an improved performance at Arden B.
"At Wet Seal, while sales were strong in the first week of January, business slowed considerably during the course of the month, driven by transaction declines.
"We responded with aggressive promotional and clearance strategies, enabling us to end the fiscal year with a clean inventory position from which to build our spring assortment in the coming weeks," he said.
Yet retailers posting better results and hoping this trend is set to continue might be disappointed. Perkins says early spring merchandise sales have got off to a slow start due to cool weather across the country, which has carried over into early February.
"We would point out that retailers face a 4.2% compare this month relative to the 2.9% compare in January," he said.
"Moreover, apparel retailers are up against a stiff 8% hurdle as they benefited from very unseasonably warm weather in weeks one and four last year. As a result, we would expect to see a meaningful sequential slowdown in February from the robust 4.5% comp racked up in January."
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