Sales Spark Big January Gains for Retailers

The Christmas spirit wasn’t enough to get consumers in the buying mood, but post-holiday clearance sales ignited spending last month at the nation’s largest retailers.

In a separate report Thursday, the Labor Department said the number of newly laid-off U.S. workers filing claims for jobless benefits fell by 12,000 last week, the biggest drop in three weeks.

Many store owners on Thursday reported double-digit percentage increases for the typically slow month of January. Gains were also attributed to milder weather throughout much of the nation and a week of tax-free shopping in New York.

“What we saw in January did represent a rebound from the somewhat disappointing Christmas selling season and it portends well for what will happen in the first quarter,” said Jeffrey Feiner, a retail analyst at Salomon Bros. Inc.

Christmas was a letdown for many of the nation’s retailers, who had anticipated shoppers would be eager to spend thanks to a healthy economy, high consumer confidence and low inflation.

Doing particularly well in January were those merchants who struggled over Christmas, and then cut prices after the holiday to empty their inventories. Limited Inc., Dayton Hudson Corp. and J.C. Penney Co. all showed a pickup in sales from December.

The Salomon Bros. retail index, the investment firm’s barometer of sales performance, rose 7.2% last month after a 6.1% gain in December.