THE ECONOMY : Retail Sales Hurt in January by Storms, California Quake

Harsh winter weather and the 6.6 magnitude earthquake in Southern California kept consumers out of stores last month, but damage to merchant profits was limited by the relative insignificance of January results in the retailing business.

The weak numbers reported Thursday reflect the impact of ice storms and snowstorms in the East and Midwest, which deterred almost all shoppers but those buying coats, boots and snow shovels.

Meanwhile, the quake damaged or destroyed hundreds of stores, including some operated by big national retailers. The disruption to the Los Angeles freeway system impeded shopper access to unscathed stores, hurting them as well.

The results weren’t unexpected. Walter Loeb, a retailing analyst and consultant, said he knew how January would turn out just by looking at a map.

“A lot of companies inundated by snow, earthquakes or anything else had very bad numbers,” he said.

Dayton Hudson Corp., with one-third of its stores in California, said the cost of lost business will result in a $25-million pretax charge against 1993 earnings.

Carter Hawley Hale Stores Inc., which operates the Broadway department stores, said January same-store sales--those at stores open at least a year--fell 3.9%, reflecting the impact of the Jan. 17 earthquake. The quake temporarily closed 14 of its stores. As of Saturday, four remained closed. For the fiscal year ended Saturday, the Los Angeles-based retailer reported that same-store sales rose 1.7%.

However, January is a relatively unimportant month in the retail year, a fact that mitigated some of the bottom-line damage for many retailers. Stores generally use the month to clear out winter and Christmas merchandise and prepare for spring.

Jeffrey Feiner, an analyst with Salomon Bros. Inc., said that in spite of the elements, retailers’ results showed “underlying consumer demand is quite favorable.”

January’s results marked the end of the 1993 fiscal year for most big retailers. Wal-Mart Stores Inc., the nation’s largest retailer, again dominated the industry, with total sales soaring to nearly $67.38 billion from $55.48 billion a year earlier.

The industry was sharply fragmented during 1993, reflecting a consumer shift toward home-related merchandise. Discount stores generally did well, and sales at department stores improved. Apparel retailers tended to founder.

Same-store sales are considered the most accurate measure of a retailer’s strength.

During January, Wal-Mart’s same-store sales rose 5% from January, 1992, while total sales were up 22%.

Kmart Corp. said same-store sales rose 2.1%, while overall business was down 1.1%.

Sears, Roebuck & Co. fared well in January, although its numbers were down slightly from its recent pace. It said same-store sales advanced 7.9% and overall sales rose 9.6%.

J.C. Penney said same-store sales at its flagship stores rose 4.6%, while total sales, including its drugstore and catalogue operations, rose 8%.

Dayton Hudson said same-store sales rose 2.9%, while overall business rose 9.3%. The company’s stores include department stores, the Target discount chain and the Mervyn’s clothing chain.

May Department Stores Co. reported that same-store sales rose 5%, while overall sales gained 8.5%. The figures do not reflect the contributions of seven California stores temporarily closed by the quake.

Federated Department Stores Inc. said same-store sales fell 4.8%, while overall sales slipped 3.2%.