Retailers, consumers and prices
Check out the upbeat but cautious forecasts for holiday sales in the U.S. and the U.K. ahead of their release later this week.
Most U.S. retailers are set to post December sales later this week and let us know just how much better things have gotten since the disastrous 2008 holiday season. They’ll need all the good news they can get — holiday sales can account for as much as 40 percent of annual sales.
Analysts forecast sales at 30 U.S. retail chains tracked by Thomson Reuters Data will have risen by 1.3 percent in December, after a slow start to the holiday season in November. All in all, discount retailers such as Target and BJ’s Wholesale are expected to have fared best for the season, while teen apparel stores like Aeropostale languish.
But analysts have sounded a note of caution, predicting victory could be short lived with consumers expected to resume their penny-pinching ways this spring.
Check out who’s in charge at Aeropostale.
No, seriously, who is in charge?
The company announced today that Julian Geiger was leaving the teen apparel retailer. (The press release was apparently written under the auspices of the Lawyers Full Employment Act.)
But instead of appointing one leader, Aeropostale went with co-CEOs. President and Chief Merchandising Officer Mindy Meads and Chief Operating Officer Thomas Johnson were named to share the top spot.
The news release does not detail how Meads and Johnson will divide the CEO duties.
What we do know is that the history of corporate America is punctuated with co-CEO arrangements that have gone awry.
When Kraft was spun out from Altria in 2001, Roger Deromedi and Betsy Holden were named co-CEOs. The relationship ended with Holden being demoted in late 2003, and eventually leaving the company. Kraft continued to struggle with lackluster innovation and seemingly ever-present restructuring, and Deromedi was out by 2006.
John Reed and Sanford Weill ran Citigroup together for a while before falling out. Reed even left the corporate world for a time.
A deep executive bench is always a plus, but in the end, one person at the top seems to be the final answer.
Also in the basket:
Rite Aid cuts view after latest loss; shares skid
H&M August sales disappoint as shoppers hunt for bargains
Buffett sings praises of a Chinese suit (WSJ)
As retailers tried to attract consumers for some post-Labor Day shopping, apparel retailers Aeropostale and Charlotte Russe beat Gap Inc’s Old Navy chain in the pricing war this month, according to Eric Beder, associate director of research for Brean Murray Carret & Co.
While Aeropostale has “never looked better” with its combination of good merchandise and prices, Arden B owner Wet Seal remains the “low price leader,” Beder said.
Check out the latest news on U.S. retail sales.
The trend was pretty much the same as it has been lately — most chains posted declines in August sales at stores open at least a year, or same-store sales.
However, many declines were not all that bad and there were a handful of increases, which could be a sign that consumers are really back to shopping.
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.
Many states that levy sales tax on clothing offer a short break on the tax in the summer, which, in turn, spurs back-to-school shopping.
Ten states, including Virginia, offered shoppers a chance to buy tax-free last weekend, with most states offering a tax break on clothing up to $100 per item, FBR Capital Markets noted in a new report.
By Nivedita Bhattacharjee
Before they decide what to wear back to school this fall, Aeropostale is giving young trendsters a new door to explore.
The company, whose stylized “A” graces the T-shirts of many American teenagers, opened its first “P.S. from Aeropostale” store in the Palisades Mall in West Nyack, New York.
With a theme that says “Happy. Fun. Cool”, P.S from Aeropostale sells clothes aimed at boys and girls from 7 to 12.
“We are thrilled to be able to offer the elementary school student a brand they can call their own,” CEO Julian Geiger said in a statement.
The retailer, which has taken market share from rivals as teens and their parents go bargain-hunting, had announced plans to enter the kids’ market in March. About nine more of the stores are slated to open this fiscal year, mainly in the New York area.
“While it is very obvious from the logo and the looks that P.S. is part of Aeropostale, the chain has a vibe all its own,” Brean Murray analyst Eric Beder said in a note. He added that while Aeropostale itself is almost all logo driven, the level of logo wear is lesser in the new chain. Still, there are plenty of “P.S.” items to be found on the shop’s site.
“We believe this store will easily suit the needs of the younger girl/boy Aero ‘wanna-be,’” Beder said.
And with touches like places for moms to relax, and a system that allows them to talk to the kids while they are in the dressing room, Beder has already marked P.S. for Aeropostale the next big thing for the company.
Will the kids and their moms second that?
(Screen shot of P.S. web site www.ps4u.com)
Check out some strong sales.
Sure, sales are still down at most chains. Still, anything that’s down less than expected is a good sign in this economy, right?
Sales at Wal-Mart‘s U.S. stores open at least a year jumped 5 percent, topping analysts’ average expectation for a 2.9 percent rise. And in a sign that improving sales are leading to better profitability, retailers including J.C. Penney, TJX and Kohl’s raised their profit expectations for their just-completed first quarter.
Check Out the drop in sales.
It was no surprise that sales were weak in December, though some retailers stood out Thursday for their worse-than-expected performance.
Wal-Mart, the world’s largest retailer, said sales at U.S. stores open at least a year rose just 1.7 percent, while analysts were expecting a 2.8 percent increase. Wal-Mart and other chains such as Macy’s cut guidance for the fourth quarter ending later this month.
Shares of Wal-Mart fell more than 9 percent on Thursday morning, dragging the Dow Jones industrial average into negative territory as well.