Retailers, consumers and prices
Check Out Line: Losses in the retail world
Penney reported a net loss of $1 million, or nil per share, compared with a year-earlier profit of $117 million, or 52 cents per share. Analysts on average expected a loss of 1 cent per share, according to Reuters Estimates.
The loss was bigger over at Abercrombie.
The clothing retailer recorded a net loss of $26.7 million, or 30 cents a share, compared with a net profit of $77.8 million, or 87 cents a share, a year earlier.
Penney has fashioned itself as a value destination in the downturn, and said on Friday that it sold more merchandise at regular promotional prices and less at clearance prices. Shoes and women’s clothing were the strongest sellers, while children’s apparel sales were weakest.
Abercrombie, which has been reluctant have its name associated with value, faced sliding sales, higher markdowns and increased costs in the quarter.
As the economic downturn has deepened, teenagers are overlooking its high-priced fashions and turn to rivals with cheaper prices like Aeropostale or Forever 21. Abercrombie has slowly begun to discount or lower the starting ticket prices on some items to address the consumer aversion to high prices in the downturn.
The company said it remained on track to open three international flagship stores in fiscal 2009, including two stores in Milan and one outlet in Tokyo.
Also in the basket:
Bloomie’s Flagship gets overhaul (WWD, subscription required)
Wal-Mart thinks locally to act globally (WSJ, subscription required)