Retail roundup: Promotions drive August US retail sales growth
All but one apparel retailer posted comparable store sale gains in August
The back-to-school selling period got off to a slow start in August, as US apparel retailers moved to drive traffic with aggressive promotional activity, with all but one retailer posting sales gains.
Research firm Retail Metrics said same store sales increased 3.8% in August, despite promotions over over the Labor Day weekend.
Retail Metrics president Ken Perkins said this week will be another key selling week for retailers, who hope to capitalise on those consumers buying essential items, as well as teens waiting to see what is in trend before buying clothes.
However, the shift towards spending on durables, vehicles and housing does raise some concerns for the biggest selling season of the year: holiday shopping.
This could, he noted, result in "stepped up discounting" as specialty apparel and department store retailers are forced to compete even harder for a limited pool of consumer discretionary spend.
According to the International Council of Shopping Centers (ICSC), same-store sales grew 3.7% during the four-week period. "August sales were softer in the apparel segment compared to July, but were steady elsewhere," said Michael Niemira, vice president of research and chief economist for ICSC.
"The back-to-school apparel demand was uneven and late and overall August back-to-school spending was stronger in the earlier part of the month compared to the end. As a result, September is likely to see steeper ‘end-of-season' discounts for back-to-school apparel to clear the remaining inventory," Niemira added.
Winners and losers
Limited Brands (now known as L Brands) met expectations with a 2% rise in comparable store sales and The Buckle beat forecasts with a 1% gain, according to Retail Metrics. The Cato Corporation, however, posted a 2% fall.
The Cato Corporation chairman, president and CEO John Cato said: "August same-store sales were within our range of expectations and consistent with our current trend. We remain cautious in regard to the remainder of the year."
Speciality clothing retailer Gap, which posted August comparable store sales growth of 2%, was helped by a 2% increase at its namesake brand, a 2% rise at Banana Republic and a 1% gain at Old Navy.
"We continue to meet our goal of driving consistent positive comp sales growth, on top of last year's strong performance," said company chairman and CEO Glenn Murphy.
Meanwhile, off-price fashion retailer Stein Mart, which posted a 3.8% comparable store sales increase, said linens, women's boutique, gifts and dresses saw the strongest sales during the month.
Women's casual sportswear, women's special sizes, men's sportswear and jewellery were more challenged however. Geographically, sales were strongest in Florida and the Southeast, while the Midwest and California performed lower than the chain.
US retailers' August 2013 sales roundup
Action sportswear and footwear retailer Zumiez said sales reached US$85.9m for the four weeks to 31 August, up 14.3% on $75.2m in the same period last year. The company, which operates 537 stores across the US, Canada and Europe, saw comparable store sales rise 3%.
For value-priced fashion apparel retailer, The Cato Corporation said sales fell 5% to $59.2m in August against $62.1m last year, while same store sales edged down 2%. The company, which operates 1,309 stores under its Cato, Versona and It's Fashion brands, said it remains cautious in its outlook.
Limited Brands, which is now known as L Brands, reported net sales of $704.7m during the four weeks to 31 August, up 5.9% from the $665.6m recorded in the same period of last year. The company, which owns the Victoria's Secret and La Senza lingerie brands, said comparable store sales rose 2%.
At denim specialist The Buckle, comparable store sales climbed 1% in August. Total sales edged up 0.3% to $101.1m from $100.8m in the prior year period at the Kearney, Nebraska-based company, which operates 451 stores.
Off-price fashion retailer Stein Mart booked a 3.8% increase in comparable store sales last month. The company, which runs 260 stores, saw total sales grow 3.7% to $83.3m during the four-week period, compared to $80.3m last year.
And speciality clothing retailer Gap Inc reported a 3% rise in total sales during August to reach $1.23bn, compared to $1.20bn in the same period of the prior year. The company, whose brands include Gap, Banana Republic and Old Navy, said comparable store sales were up 2%, driven by gains across all of its labels.
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