Check out the October monthly sales results due this week.

Think of an adjective for “bad” and that pretty much describes Wall Street analysts’ current view for how the month shaped up. 

Retail chains, like Wal-Mart, Costco and J.C. Penney, will release October results on Wednesday and Thursday, and Thomson Reuters is forecasting a decline of 0.1 percent. 

“If the index actually comes in at -0.1 percent, this would be the weakest same-store sales result ever registered since Thomson Reuters began collecting estimates in 2000,” Thomson Reuters said.

Department stores and specialty retailers are expected to be the worst hit, mitigated only slightly by shoppers seeking bargains at discount chains or drugstores. 

“Most Americans have been caught like deer in headlights, not knowing what financial or economic disaster is around the corner,” Susquehanna Financial Group analyst Thomas Filandro wrote in a note. “More and more consumers are broadly pulling back, leaving the retailer with little choice other than to promote.” 

One positive for retailers in October was gas prices. The average price for a gallon of regular gasoline, which was $3.63 at the end of September, fell to $2.65 by the end of October, according to the Energy Information Administration.

Also in the basket:

ADM profit soars on higher prices; shares jump (Reuters)

InBev’s Budweiser purchase resolve put to the test (Reuters)

Madison Avenue Takes Hit From Economic Troubles (WWD, subscription required)

(Photo: Reuters)

Check Out Alaska Gov. and hockey mom Sarah Palin, who’s not only John McCain’s vice presidential pick, but a luxury fashion maverick.

The Republican National Committee has spent more than $150,000 since late August to outfit Palin and her family in the fanciest of duds from department stores like Saks and Neiman Marcus, says politico.com.

The financial disclosure records, included under the line item “itemized coordinated expenditures,” show RNC expenditures at Saks Fifth Avenue in St. Louis and New York of $49,425.74 in September. Based on Saks’  September comparable-store sales of $273.2 million,  Palin accounted for .018 percent of sales.

The RNC also spent $75,062.63 during one September trip to Neiman Marcus, says politico.com, which would represent .012 percent of Neiman’s September comparable-store sales of $406 million.

The RNC spent only $789.72 at Neiman-owned Barneys New York but dropped $5,102.71 at Bloomingdale’s, which is operated by Macy’s, said politico.com, a website that tracks political news.

Hefty primping expenditures on the campaign trail are nothing new. U.S. Senator Hillary Rodham Clinton, D-NY, received guff for her expensive custom-made pantsuits, which cost upward of $6,350 each.

The RNC also spent $4,716.49 on Palin’s hair and makeup, and made $295  in purchases at high-end children’s stores Pacifier and Steiniauf & Stroller Inc., according to politico.com.

Tracey Schmitt, a spokeswoman for the McCain-Palin campaign, said there are plans to donate the expensive clothing to charity after the campaign.

“With all of the important issues facing the country right now, it’s remarkable that we’re spending time talking about pantsuits and blouses,” Schmitt said in a statement.

Sales at luxury department stores have suffered in recent weeks as the slowing economy and global financial crisis took a toll on even affluent shoppers, and the strengthening of the dollar deterred foreign tourists who had given high-end stores a boost in previous quarters.

Also in the basket:

McDonald’s profit tops view; shares rise (Reuters)

PepsiAmericas Q3 profit tops Wall Street view (Reuters)

Philip Morris, Reynolds profits beat Wall St view (Reuters)

Layaway plans make a comeback in credit crunch (WSJ)

(Photo/Reuters)

Check out the cool and wet weather that hit U.S. retailers in September as the month will go into the books as the fifth coolest in the last seven years and much cooler than last year, according to Planalytics Inc, a business weather tracking company.

While the mean September temperature in the 96 largest U.S. metro areas fell about 4 points from last year to 64.2 degrees, retailers selling rainwear (demand up 29 percent based purely on weather), pants (up 13 percent), dehumidifiers (up 10 percent) and hot cereal (up 2 percent) benefited, Planalytics said.

September also was the 11th wettest since 1961, driven by six tropical storms, including Hurricane Ike, the consulting firm said. Some cities, such as Chicago, St. Louis and Wichita, Kansas, had their wettest Septembers ever recorded, while Houston, Kansas City and Little Rock, Arkansas, had months that still ranked among the the 10 wettest.

“The tropical systems that pummeled both the Gulf and Atlantic coasts became the real weather story of the month. Despite challenging economic times, businesses that supply pre- and post-hurricane staples such as gas, ice, water, non-refrigerated foods, generators, tarps, plywood, and chainsaws experienced brisk sales in the affected areas, driven by need-based purchases” Fred Fox, Planalytics CEO Fred Fox said in a statement. “In addition, foot traffic into grocery stores, restaurants, and hotels was robust along evacuation routes.”

The weather was a favorable factor for 78 percent of the publicly traded companies tracked by Planalytics, with the biggest positive comparisons seen at BJ’s Wholesale Club (store traffic up 24 percent), Family Dollar Stores (up 22 percent), Shoe Carnival (up 16 percent) and Target (up 13 percent).

More broadly, the index for retailers that sell a broad line of merchandise was up 14 percent based solely on weather, and it rose 8 percent for retailers that sell mostly apparel, Planalytics said. On the down side, were indices for home centers (off 4 percent) and restaurants (off 6 percent). 

Also in the basket:

Global Fears of a Recession Grow Stronger (New York Times)

Home Depot Learns to go Local (Wall Street Journal)

Safeway third-quarter profit rises

(Photo/Reuters)

Check Out KFC challenging the American people to create a family dinner for under $10, the same price as their Value Meal.

Consumers have been eating at home more often as high food and gas prices and a decline in home values pressure budgets. KFC is trying to win back those customers by convincing families it’s just as cheap to buy its value meal, priced at $9.99, as it is to buy dinner at the supermarket and cook at home.

The meal comes with seven pieces of Original Recipe chicken, one large side and four buttermilk biscuits.

“From gas to grocery bills, everyone is looking for ways to cut costs,” says KFC’s “value expert” Stephanie Nelson. “With a few simple tips you can host everything from a fabulous family dinner to a large gathering on a budget and it can start with something as simple as driving through a KFC.”

KFC also offers tips to “take take-out to the next level,” which include using candles, music and flowers cut from home gardens.

Shares of KFC’s parent company Yum Brands Inc hit a 52-week low of $31.38 on Tuesday before bouncing up slightly to close at $32.61.

Also in the basket:

Wolverine quarterly profit beats expectations (Reuters)

Many Foods Will Soon Be Labeled by Country of Origin (New York Times)

Circuit City turns to restructuring firm (New York Post)

(Photo/Reuters)
 

Check Out private equity gobbling up department store chain Boscov’s Department Store LLC, one of the latest retailers to get into trouble as customers reduce spending.

Boscov’s, which filed for bankruptcy protection last month, has agreed to sell most of its assets to private equity firm Versa Capital Management Inc. for an undisclosed amount.

Founded in 1911 by Solomon Boscov, who emigrated from Russia to Reading, Pennsylvania with $1.37 in his pocket, the department-store chain grew from its first “Economy Shoe Store and Dry Goods Annex” to a chain of more than 50 stores across the Eastern Seaboard.

But the collapsing housing market, skyrocketing energy and gas prices and higher food costs caused consumers to spend less on discretionary items, and weak credit market conditions led to vendors tightening terms, which proved too much for Boscov’s to weather.

Boscov’s joins more than a dozen retailers to go bankrupt in the past year, including Bombay, Goody’s Family Clothing, Linens n’Things, Mervyn’s, Sharper Image, Shoe Pavilion and Steve & Barry’s.

Also in the basket:
 

Retailers go beyond discounts to win customers

Gap signs franchise deal for expansion in Mexico

Pucci names replacement for Matthew Williamson

Topshop Delays SoHo Opening (WWD, subscription required)

(Photo: www.boscovs.com)

When it comes to luxury handbags , wealthy American women view Leiber bags as the most prestigious,  but most often buy Coach, according to a survey released on Wednesday.

The survey, conducted by a research firm called The Luxury Institute, found Leiber scored highest on its “Luxury Brand Status Index”, which includes measurements for quality, exclusivity, social status and self-enhancement (meaning the brand can make the buyer feel special).

Tied for second out of thirty luxury brands included in the survey were Hermes and Tod’s, followed by Jimmy Choo, Bottega Veneta and Valentino.

While those brands scored the highest in terms of perception, here are the brands that survey respondents said they purchased most frequently in the past 12 months.

Coach was far and away the bag purchased most frequently, according to 25.7 percent of respondents, according to the survey. A distant second and third were Kate Spade, with 4.6 percent, and Gucci, with 4.1 percent.

Coach was also the bag the biggest number of respondents (27.4 percent) said they would buy the next time they purchased a bag, followed by Kate Spade and Louis Vuitton.

Wonder if that has to do with the brand’s familiarity? When asked “which of the following brands are you familiar with”, 74 percent of the survey’s more than 1,000 women with annual incomes over $150,000 said they knew of Coach.

Compare that with only 11 percent for Tod’s and 10 percent for Leiber.

It looks like exclusivity really does lead to prestige.

(Photo: From Leiber website: “Exotically styled bag made of crocodile with magnetic flap closure and Austrian crystal trim” $5995.00)

Got an old suit gathering dust in the back of your closet? Men’s Wearhouse wants to give it to someone who could make better use of it.

The retailer is holding a national suit drive at 580 of its U.S. locations, collecting donations of used suits, sport coats, slacks, dress shirts, ties and belts. The clothing will be distributed to more than 120 local and regional non-profit organizations in cities across the country and given to men in need who are re-entering the workforce.

“The proper attire can truly make a difference in an individual’s life,” said Jerri Rosen, founder of Working Wardrobes in Fountain Valley, California, in a statement released by Men’s Wearhouse. “With these donations, men will have the opportunity to walk into an interview with confidence - an essential step toward economic stability.”

Other companies that have participated in clothing drives include Dress Barn, Robert Half International and Hilton Hotels. Perhaps other retailers will follow suit?

(Photo/Reuters)

American Eagle is fighting a fickle foe: fugly jeans.

What makes jeans sit on the shelf instead of flying off the shelves? That’s up to the whims of American Eagle’s 15- to 25-year old target customer. The retailer’s summer offerings didn’t quite meet the expectations of its core audience, and sales suffered.

“We had a number of styles that just did not perform. And that hurt us very, very much,” American Eagle’s Chief Executive Jim O’Donnell said on a call with analysts.

“We’ve identified those (styles). We’ve taken appropriate action, both from a mark down point of view and also from a repositioning of holiday for ‘08,” O’Donnell continued.

While O’Donnell declined to identify the worst selling styles, the retailer says it’s changing things up for the holiday season and next spring, bringing in at least four new styles for women and a few new lines for men “that we think are going to be very brand appropriate,” O’Donnell said.

 American Eagle posted sharply lower profits on Tuesday, hurt by weaker sales and increased markdowns needed to move unsold merchandise, and forecast third-quarter results below analysts’ estimates. 

(Photo/American Eagle)

In a  bid to stretch shrinking grocery dollars, U.S. consumers are shunning restaurants for home-cooked meals, clipping coupons, scouring grocery store flyers for deals and consolidating trips to save gas.The U.S. Agriculture Department has warned that 2008 could bring the biggest increase in food prices in nearly 20 years. If shoppers’ words match their actions, it seems that frugal will become the new fashion.

Roughly 80 percent of respondents to a recent survey said they planned to continue those penny-pinching ways even after the economy turns up and they have more coins jingling in their pockets, according to retail consulting firm Precima, which commissioned the online survey that polled more than 2,000 U.S. consumers.

Half of the consumers said they cut back on frozen dinners, while more than 40 percent said they nixed chips, cookies and dessert items like ice cream and cake when money was tight.

Beer, wine and spirits fared only slightly better — 40 percent of respondents said they stopped buying booze to save cash.

Still fewer people — nearly one-third of respondents — said they were already trading down from national brands to lower-priced store brands.

“Despite the challenging economy, consumers are very reluctant to switch brands to save money,” said Brian Moss, Precima’s general manager.

No wonder big packaged food companies like Kraft and Kellogg can raise prices.

(Photo: Reuters/Mario Anzuoni)

Check out how bad retail sales can actually mean good earnings.
 
It all comes down to inventory management. Retailers have aggressively cut inventory levels in order to cope with the slumping economy.
 
The bad news resulting from that strategy came last week when many retailers posted disappointing sales, in part because they had less goods on hand to sell.
 
“Our inventory levels in … clearance and transitional categories were significantly lower than last year, affecting sales results, but leading to improved gross margins,” Kohl’s Chief Executive Larry Montgomery said in a statement.
 
But the good news could come over the next several weeks, when retailers report second-quarter earnings. Those slashed inventories should have helped them preserve margins, which help profits.
 
So it’s not like the U.S. consumer is buying that much. But at least retailers didn’t get left with shelves of unwanted inventory.
 
Also in the basket:
 
Giant retailers look to sun for energy savings (N.Y. Times)
 
InBev seen posting modest profit growth in Q2

(Photo: Reuters)