Advertisement

A Mixed Bag for Clothing Retailers

Share via
Times Staff Writer

The nation’s big retailers reported mixed November sales results Thursday despite a surge in Thanksgiving weekend shopping, while some California firms told of solid gains.

Sales at stores open at least a year -- a key measure of growth -- dipped 0.1% last month from a year earlier, the first such drop in November since at least 1970, according to Bank of Tokyo-Mitsubishi.

San Francisco-based Gap Inc., parent of Gap, Old Navy and Banana Republic stores, said same-store sales rose 9% in November, compared with a 25% decrease in the same period last year.

Advertisement

Pacific Sunwear of California Inc., an Anaheim company that sells casual clothes to teens, said same-store sales jumped 11.7% last month, while Industry-based Hot Topic Inc., which sells music-themed apparel and accessories to teens, said comparable-store sales rose 4.7%.

Elsewhere, sales drooped in November, even among industry darlings.

Wisconsin-based Kohl’s Corp., a discount apparel retailer that plans to open 28 stores in Southern California next spring, said same-store sales dropped 3.4% for the month. And discounter Target Corp. of Minneapolis, which operates Target, Mervyn’s and Marshall Field’s stores, said comparable-store sales decreased 6.7% from the year before.

The disconnect between the stronger-than-expected results over Thanksgiving weekend--the official launch of the holiday shopping season -- and the lackluster sales for the month highlight the key role low prices are now playing in sparking sales, experts say.

Advertisement

But they caution that it would be a mistake to put too much stock in November comparisons because Thanksgiving fell later in the month this year, pushing more holiday sales into December. To accurately gauge holiday results, sales for the two months must be combined, they say.

With the days till Christmas rapidly dwindling, analysts say retailers and bargain-driven consumers now are locked in a game of “retail chicken,” as one of them put it, waiting to see who will flinch.

“There will be high pressure on shoppers to do their shopping, and to the extent that they refuse to do it without bargains, it puts intense pressure on retailers to offer incentives,” said Kurt Barnard, president of Barnard’s Retail Trend Report in New Jersey. “It’s a game of chicken. Who caves in first?”

Advertisement

But even with limited promotions, Hot Topic said its sales hit records on the weekend after Thanksgiving and the weekend before. For the month, Hot Topic’s sales jumped 29%. Analysts said the company has excelled partly because its products are different from what teens find elsewhere in the malls.

Gap, the nation’s largest specialty retailer, said November’s results “slightly exceeded” its projections at the start of the month. The company said shoppers are responding positively to its marketing and holiday products, including multicolored scarves, sweaters and hats. The month also is being compared with a very weak November last year.

Certainly not all California retailers were cheering Thursday. Foothill Ranch-based Wet Seal Inc., which sells trendy clothes to girls and young women, said its comparable-store sales fell 9.7% in November. And Brisbane-based Bebe Stores Inc., which also sells apparel to trend-conscious young women, said its comparable-store sales dropped 15.1% in November, after a 10.3% decrease in the same period last year.

PacSun’s earnings were up 97% through the third quarter. PacSun also said it now expects fourth-quarter earnings will exceed by 3 cents analysts’ current expectations of 52 cents a share.

On Thursday, the company declared a three-for-two stock split, the fifth three-for-two split in the last seven years. Investors boosted PacSun’s share price 6% to 27.64, up $1.59, in Nasdaq trading.

Hot Topic’s shares gained 38 cents, to $24.38; Wet Seal closed at $11.36, down 43 cents; Bebe was unchanged at $13. All trade on Nasdaq.

Advertisement

*

(BEGIN TEXT OF INFOBOX)

Retail sales

Percentage change in November same-store sales from year-ago period:

Retailer and % change

Pacific Sunwear -- +11.7%

Gap -- +9.0

Hot Topic -- +4.7

Wal-Mart -- +2.6

J.C. Penney -- 0

Nordstrom -- -1.0

Limited Brands -- -2.0

Gottschalks -- -4.0

Target -- -6.7

Federated (Macy’s) -- -7.4

May -- -7.9

Wet Seal -- -9.7

Sears* -- -10.9

* Domestic stores only

Source: Company reports

Advertisement