Retail Sales Up 4th Straight Month in May

U.S. retailers on Thursday reported healthy increases in May sales, as demand for clothing remained strong and a thirst for spring and summer goods kicked in.

It was the fourth straight month of robust apparel sales, following two years of sluggish demand.

In addition, much of the clothing sold last month was at full price. Retailers are keeping inventory leaner, so they don’t have to slash prices as they did in previous months to stay competitive. That indicates healthy profit margins that will boost earnings.

“There’s been a tremendous reduction in the number of sales going on, and that bodes well for the bottom line,” said Alan Millstein, publisher of Fashion Network Report.

Sales from stores open at least a year, known as same-store sales, at Wal-Mart Stores Inc. rose 5% from the year-ago month, while Sears, Roebuck & Co.’s rose 10%. The nation’s No. 1 and No. 2 retailers said clothing sales contributed to the increases. Clothing specialty chains also reported gains--including Gap Inc., Limited Inc., TJX Cos. and Intimate Brands Inc.

Consumers say they’re buying more clothes because stores are offering more appealing fashions and because they need to replenish aging wardrobes.

“I do most of my shopping for replacements,” said Lorraine Prugh of Doylestown, Pa., while shopping at an Ann Taylor store in Princeton, N.J.

In fact, 45% to 48% of shoppers say replacing garments that are wearing out is the biggest reason they’re shopping lately, said Britt Beemer, chairman of America’s Research Group, a behavior-research firm that talks to as many as 8,000 consumers a week.

And the revival of clothing sales looks likely to continue.

“Apparel sales are probably going to hold up through fall and winter because of the ‘replacement mode,’ ” said Kurt Barnard, president of Barnard’s Retail Marketing Report.

Same-store sales are considered the most accurate measure of a retailer’s strength. They exclude sales from stores that have been closed and from new stores, which often have disproportionately strong sales.

Sears said its same-store sales rose 10.2% and total sales gained 12.1%.

Dayton Hudson Corp. said same-store sales were up 3.3% and total sales rose 9.8%. The company’s Mervyn’s clothing stores fell sharply, but its Target discount stores had a good month.

Wall Street bid retail stocks higher in recent days, expecting a decent set of numbers Thursday. Most of the stocks were little changed, although Dayton Hudson rose $4 to $107 a share on the New York Stock Exchange after announcing it expected strong second-quarter earnings.

The Salomon Bros. retail index, the investment firm’s barometer of sales performance, rose 5.2% in May after a 1.3% gain in April. In May 1995, the index rose 4.2%.

J.C. Penney Co., which focuses on apparel, said its same-store sales were off 0.8% and total sales fell 0.9%.

Federated Department Stores Inc. said same-store sales rose 2.1%, while total sales were up 10.1%. Chairman Allen Questrom said in a statement that home-related merchandise was particularly weak.

May Department Stores Inc. said its same-store results were up 7.2%, while total sales picked up 13.9%.

Apparel retailer Limited Inc., which had been one of the hardest-hit during the long drought, said same-store sales rose 6% and total sales rose 14%.

Gap said its same-store sales rose 8%, while total business was up 27%.

These figures are narrower than retail sales numbers released by the Commerce Department, which also reflect sales of restaurants and auto dealers. The government’s retail sales report will be released Thursday.