Blog: July not quite blooming
Joe Ayling | 14 August 2007
July was a dry month for some US retailers who reported same-store figures below expectations last Thursday (9 August).
The bottom line was that, with house and gas prices hanging on a cliff-edge in the country, a great deal of people were less willing to spend on fashion for the moment. Analysts have not levelled all the blame on the consumer though, and all eyes are on whether retailers can now offer something fresher in months to come.
Admittedly, Wal-Mart managed to increase same-store sales 1.9% during the month, largely by slashing prices. Other department stores Nordstrom and Saks were among those painting a brighter picture too, through sales events and the growing popularity of luxury goods.
On the other hand, Gap, Abercrombie & Fitch, AnnTaylor Stores, Limited Brands, United Retail Group and Macy's all reported declines in July sales from stores open more than a year.
Reuters quoted SpendingPulse as saying that retailers had suffered "summer doldrums" during the month, with delayed back-to-school spending sprees.
Gap combined its July sales release (same-store figures down 7%) with an update on job cuts so far this year. In total, 1,500 jobs have been terminated to streamline operations, including Forth & Towne. It also recognised approximately US$20m of expenses during the second quarter period, primarily for severance payments.
With such a slow first half of monthlies for US retailers, some apparel firms will be on the edge of their seat next month hoping that the summer sales season finally blooms.
By Joe Ayling.
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