Blog: Retailers' results a mixed bag
Leonie Barrie | 9 November 2009
US retailers posted a mixed bag of results last week, despite October same-store sales putting in their best monthly performance for more than a year.
Sales were in part bolstered by easy comparisons with the year-ago period when consumer spending went into freefall. But it's also clear from the figures that shoppers are continuing to trade down to lower-priced brands and retailers as worries about job losses, debts and the economy continue to persist.
Other factors lifting October's results include cold weather sales of seasonal merchandise such as winter coats and knitwear, and strong promotions and deep discounts.
Attention is now switching to the looming holiday shopping season – the most important event in the sales calendar – which kicks off in just a few weeks.
At apparel group Liz Claiborne, third quarter loss hit US$91m, 32% up on last year, as sales continued to fall. Third quarter comps were ahead of the company's own guidance, but the declines still make pretty grim reading: Juicy Couture down 13%, Lucky Brand down 16%, Kate Spade down 3%, Mexx down 13%, Liz Claiborne down 13%.
However, CEO Bill McComb scents some sign of recovery in a fourth quarter even though it is, by his own admission, likely to result in another double-digit sales decline.
US fashion company Polo Ralph Lauren, meanwhile, saw its second quarter profit rise 10%, and reported gains in market share after “disciplined operational management” helped offset a 4% drop in sales. The firm said it will continue to invest in high growth international markets, including a double-pronged effort to control brand operations in Japan and South East Asia and expand into surrounding markets.
Marks & Spencer is also eyeing more stores in China despite the teething problems it faced after launching a first outlet in Shanghai last year. Chief executive Sir Stuart Rose said the retailer's broad appeal helped the company towards a 1.7% growth in first-half general merchandise sales. But he said the firm remains cautious in its outlook for Christmas and the year ahead despite posting a slight gain in first-half profit and increasing its market share in clothing.
Uncertainties over the European Commission’s plans to extend anti-dumping duties on imports of leather shoes from China and Vietnam continue to worry retailers, importers and manufacturers. The EC has been accused of ignoring industry concerns about the decision after it sent Member States its final conclusions into the investigation the day after feedback was filed. And China's shoe manufacturers told just-style they are bracing for a further hit to exports.
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