NEW YORK — Breathing a sigh of relief after a late pickup in holiday sales, retailers on Monday were focused on aggressive price promotions as they moved quickly to get full-priced spring goods on their selling floors.
Retailers ranging from Nordstrom to Bluefly, as well as General Growth Properties, stressed getting spring merchandise out early was a priority.
“We’ve converted a lot more than we did last year,” said Bloomingdale’s chairman and chief executive officer Michael Gould.
In a holiday season that seemed to mostly drag, a much-needed lift in business occurred last week, peaking Friday and expected to be sustained through the week. Based on the last few days, retailers are at the point where they now are relieved and even pleased about December. With some wind at their backs, they’re expecting this week to be fueled by three factors: nationwide post-Christmas sales blasting markdowns of 40 percent or more off fall and holiday goods; spring merchandise that has just arrived to selling floors, and customers redeeming gift cards. Gift cards emerged as the number-one gift item and have in three years gained enormous popularity.
Several store executives interviewed Monday predicted they won’t be stuck with too much inventory at the end of the month, and feel confident about meeting the month’s sales objectives, which call for low-to-mid single-digit comp-store gains in most cases.
“We don’t have any big train wrecks that we have to get rid of,” said Pete Nordstrom, president of Nordstrom’s full-line stores. “We’ve done a pretty good job of flowing merchandise this year.”
“It wasn’t a wipeout, but there’s no champagne,” said one East Coast retail ceo.
Wal-Mart and Target reported over the weekend that with business tracking well enough, December sales gains will fall in line with their expectations.
General Growth Properties, the nation’s second-largest mall developer, said most of its retailers reported making plan last week, with single-digit sales increases over last year. Traffic was particularly strong the day after Christmas at Northeast malls.
And Macy’s East apparently did well last week, too, despite the three-day transit strike that depleted volume from its Herald Square flagship. “Last week was good. The customer shifted into gift-giving categories and I am optimistic the month will finish out strong,” said Ron Klein, chairman and ceo. “We did significantly better in areas that were not impacted by the strike. The customer feels positive.”
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Still, this week is pivotal. “Retailers have four imperatives for the after-Christmas period — to aggressively sell down to the walls on fall and holiday merchandise, convert selling floors to fresh spring fashion ASAP, induce as much gift card redemption business as possible, and stay in stock on wear-now, cold weather basics without overbuy,” said Arnold Aronson, managing director of retail strategies, Kurt Salmon Associates.
Contemporary chain Bebe has another reason to look forward to this week. “Our consumer heavily likes to go out,” said Greg Scott, ceo of Bebe, and that means hearty partying New Year’s Eve. Bebe caters to a young crowd dressing up for evening activities. This week, Bebe is not placing sale tables at the front of the store. Rather, there are New Year’s tables with key items to get into the party mode: pencil skirts, camisoles and novelty looks. This week is also important “because it gives us an early indication of spring.”
“It was definitely a very late Christmas,” added Scott, though he characterized Friday as “an excellent day and it seemed to really hold out.”
The week after Christmas has been building into bigger and bigger business for years, with consumers knowing they’ll find the deepest discounts at this time, and with gift cards in the hands of many.
“The month isn’t over. We’ve got a big chunk of business that happens,” Nordstrom said, noting that his store kicked off its “half-yearly” men’s sale Monday, offering 25 to 50 percent on certain merchandise. He said the bulk of gift cards would get redeemed over the next six weeks.
Aside from gift cards, the holiday season has been highlighted by strong hard goods sales, particularly consumer electronics, such as iPods, Xboxes, DVDs and flat-screen TVs. Also, energy-efficient appliances have been “flying off the pallets at Sears, Lowe’s and Home Depot,” according to consulting firm Consumers Growth Partners president Craig Johnson. He cited setback thermostats, furnace heat managers, snow throwers, power tools and fireplace equipment as other bestsellers.
On the fashion side, sales have been best in boots, designer handbags, contemporary sportswear, premium denims and fine jewelry. This week is also expected to be big in denim across a variety of price points, two retailers said. They agreed that gift cards would boost denim activity, partly because bottoms are not generally big gift items.
This season, markdowns were aggressive out of the gate, and even bigger Monday, though according to analysts and retailers, markdowns were largely planned in advance.
The calendar, with Christmas and Hanukkah falling on Sunday, worked in retailers’ favor. Yet several merchants characterized Saturday as a letdown, with traffic thinning out earlier than expected. Friday was a different story. “It was an out-of-sight day,” said Bloomingdale’s Gould.
Last week, “We visited four malls on the East Coast and traffic was up from previous visits as expected — and more shoppers were carrying bags. The New York City Transit strike has impacted sales in the city, but we believe the overall impact will be minimal on the publicly traded specialty retailers as many of these consumers will be able to shop locally at the national chains,” wrote Merrill Lynch retail analyst Mark A. Friedman in a research report.
DEPARTMENT STORES
Bloomingdale’s cited coats, dresses, designer business, contemporary men’s and women’s sportswear, handbags, shoes, fine jewelry and children’s wear as bestsellers, while Macy’s East said “aspirational” goods, notably Coach, and other brands in designer handbags and fragrances, as well as fur-lined outerwear with hoods and women’s shoes and boots drove sales. “We have significantly more fresh receipts than last year and I think the customer will reward us for that,” said Macy’s East ceo Klein.
Nordstrom cited Gwen Stefani’s L.A.M.B. banner fleece hoodie, and True Religion jeans as among its bestsellers. Overall, premium denim and knitwear have been strong at the chain, as well as watches, handbags and Ugg boots.
Sears, Roebuck staged “buster specials” from 7 a.m. to 10 a.m. on Monday, with such offers as $19.99 for a Craftsman Laser Trac Level, a $14.99 Craftsman 16-piece screwdriver set, a $34.99 Kenmore canister vacuum, and an extra 10 percent off fine jewelry and watch clearances 40 to 70 percent off. Sears has been doing well in hard goods, but has been in weak in apparel.
MASS CHAINS
Wal-Mart said December sales were tracking within its forecast for 2 to 4 percent growth at its U.S. stores open at least a year, while there were reports that Target expects to meet its goal of 4 to 5 percent growth.
Mervyn’s said it was seeing the payoff from increased promotional efforts, better merchandising and store redesign. “We are ending December with our seventh straight month of double-digit comp-store increases,” said a spokeswoman. “And we’re on track for double-digit increases going into the fourth quarter.”
Early-bird specials, which were successful after Thanksgiving, were also the big post-Christmas push. The specials, which were going on from 6 a.m. to noon on Dec. 26, included 50 percent off items such as holiday trim, gift wrap, holiday dinnerwear, women’s sweaters, activewear and boots. “Customers have really been liking the fun, trendy items this season,” the spokeswoman said. Handbags, juniors’ tops, women’s shoes and houseware items such as pillow and sheet sets have been particularly popular.
At the Kmart in Westwood, N.J., Christmas decor and jewelry were marked down 50 percent. Jaclyn Smith’s holiday collection, including gold brocade jackets and skirts, was priced to sell at 30 percent and 40 percent off. Elsewhere in the department were chenille sweaters for $6, Basic Editions Oxford shirts for $8.99 and black beaded evening jackets for $12.99.
“The store is busy,” said a manager who declined to be identified, though there were few shoppers in the middle of the afternoon. “We’re doing more selling than taking returns.” The bestseller of the season, he said, was a large plastic tub to tote things in.
SPECIALTY CHAINS
“As expected, we have seen a step up in promotions, but we believe levels are manageable for the most part and planned,” said Friedman of Merrill Lynch, in his report. “Several stores in which we were concerned about high levels seemed to have sold through enough merchandise to make the stores look less dense. This includes Aéropostale, Gap, Old Navy and [American Eagle Outfitters].”
At Maurices, “Last weekend ended stronger than our estimate and we made the estimate for the week,” said Lisa Rhodes, executive vice president and general merchandise manager. She said purchases of gift cards through the first three and a half weeks of December were up in the mid teens. “From that we feel that week five will continue to grow in importance.” She said Maurices has had a solid performance, and has been less promotional than a year ago. “Less of the inventory is on sale.”
Dress Barn slightly exceeded plan for the week, with Friday strong, said Keith Fulsher, senior vice president and gmm. Dress Barn’s post-Christmas sale offers up to 50 percent off select categories. Fulsher classified December as “OK” and noted that week five could swing the month. Dress Barn and Maurice’s are divisions of Dress Barn Inc.
“While traffic has been a bit behind last holiday as it has all year, we’ve continued to see stronger performance in sportswear, outerwear and footwear, with slower sales in lifestyles, such as room decor,” said Robert Atkinson, vice president of communications for Too Inc., parent of Limited Too, the tween chain. Atkinson predicted strong selling this week from the redemption of Limited Too Bonus Cards (get $10 off any purchase of $20 or more until Jan. 29), as many “tweens received them as stocking stuffers and Hanukkah gifts, and like to redeem them while they’re out of school.”
Tweens have bought into layered looks, such as coral sequined camisole tops, priced at $18.50, under a matching paillette shrug, $22.50 and side sequin Havana gaucho, $36.50.
J. Crew’s bestsellers included embellished sweaters, winter whites, sparkled tanks, and vacation collection items just brought in about a week and a half ago.
LUXURY
While luxury sales continued to be good, some executives noted a recent slowdown in momentum. Neiman Marcus declined to comment on December business but cited gold jewelry, long layered necklaces, contemporary sportswear, designer handbags, notably those from Chloé and Balenciaga, and Oakley mp3 sunglasses, as among its bestsellers.
At Missoni, “The business is coming late, but I had a very decent Christmas. It’s where I wanted it to be,” said Diane Levbarg, executive vice president. “We have done very well with our bathing suits.”
At Nicole Miller, ceo Bud Konheim said the company’s 11 owned stores performed well over the holidays and received a boost from the premium Nicole Miller Signature line. “The biggest surprise we had over the holiday was the Madison Avenue store saw double-digit increases during the transit strike,” said Konheim. “All of the sexy stuff has been selling.”
“We’ve had an incredible Christmas and fourth quarter, and the [holiday shopping] season really started at the beginning of October,” said Susan Franklin, general manager of the Bulgari Boutique at South Coast Plaza, in Costa Mesa, Calif. “It’s my 20th Christmas at South Coast Plaza, and this was the best season ever seen.” Franklin, who attributed much of the success to a loyal Orange County clientele, said the bestsellers at the store were the high jewelry pieces, such as diamonds and emeralds. The company also launched their new watch collection, Assioma, which blew out of the store, she said.
ONLINE
Amazon.com registered more than 108 million items ordered during the holiday season, including more than 3.6 million on Dec. 12, its busiest day, according to a spokesman. In the 2002 holiday season, more than 56 million items were ordered.
Among the top sellers: enough running shoes to outfit nearly all the participants of the Boston Marathon and more than 600,000 gift certificates. IPods ruled the electronics area, but jewelry, beauty products and apparel were all among the top sellers. Coats were popular, including a Pritti Women’s double-breasted wool pea coat, priced at $29.89. Other hot items were Hue Women’s Muk Luk slippers, $4.89; a 20-inch sterling silver Eternity cross pendant, $20; Movado’s women’s Amarosa stainless steel watches, $239 to $259, and the Philosophy candy cane shower gel and bubble bath, $18.
Bluefly reported two big ordering surges on Dec. 12 and 13 and again on the 19th. A free upgrade to two-day shipping encouraged the business. According to Melissa Payner, ceo, “Our bestsellers were the high-end designers. Cashmere was incredible, black in particular. Also, anything with fur trim, velvet, ribbons, and other embellishments, including denims, T-shirts and shoes. “December continued to be very strong for us.” While promoting sweaters and outerwear, “We are bringing in new receipts to keep people interested.”
MALLS
Gift cards, Xboxes, iPods, and fine jewelry were top sellers at Atlanta’s Lenox Square, while apparel was “stronger than last year overall,” according to Ann Gersna, area director for mall marketing for Lenox Square and Phipps Plaza, both owned by Simon Properties. Crowds grew during the week before Christmas, but shoppers appeared to be buying fill-in gifts, rather than major last-minute shopping, said Gersna. Bath and body products were also strong with brisk business reported from the Origins store at Phipps and Kiehl’s at Lenox Square.
A spokeswoman for South Coast Plaza, confirmed jewelry was one of the best-selling categories, as were handbags from Chloé, Gucci, Fendi and Louis Vuitton. The first West Coast location for Chloé opened at the center a week before Christmas and sold out on the Paddington bag after only the second day in business. “It was definitely a very merry Christmas,” she said. “Through November, we came off of more than 30 straight months of double-digit increases and we expect to see that through the end of December.”
A spokeswoman for the Taubman Centers, said Monday saw consumers buying holiday decor, apparel, electronics, accessories and jewelry. “The stores surveyed felt it was a good holiday season, in particular Friday,” she said.
NorthPark Center in Dallas reported traffic up more than 20 percent last week, according to Christine Szalay, director of marketing. “On Friday, traffic was shoulder-to-shoulder. This year, we did not have many stores breaking sales until mid-week. Up to that point, there were more gift-with-purchase offers rather than deep discounts. Sales are expected to be up double digits center-wide.” Carrie Ivy, manager of Sharper Image at NorthPark, said the store was up 10 percent. Origins said sales for December rose 17 percent over last year, noting that the store’s average transaction was $9 higher than a year ago.
— With contributions from Michelle Dalton Tyree, Los Angeles; Evan Clark, Washington; Georgia Lee, Atlanta, and Rusty Williamson, Dallas