Retailers, consumers and prices
Sears, Roebuck is looking to grow home-goods sales by adding stores away from malls as shoppers flock to new retail centers.
That off-mall strategy includes more dealer stores located in smaller, rural markets, and home appliance showrooms in big cities.
Sears has about 860 dealer stores and 24 appliance showrooms, in addition to its more than 900 traditional mall-based stores. This year, the retailer is adding 75 dealer outlets and about 50 appliance showrooms, said Steve Titus, vice president of Sears Dealer Stores, in an interview.
Check out some positive signs for home improvement stores?
Goldman Sachs raised its rating on Lowe’s to “buy” from “neutral,” citing, in part, stabilization in the housing market.
“Stabilization” might be a stretch. But Goldman noted that home sales fell 15.5 percent in July, following a 17.9 percent decline in June. The drop was the smallest since July 2007 and marked the fifth consecutive monthly improvement.
The tumbling U.S. housing market has clobbered both Lowe’s and Home Depot, so any signs that the worst might be over could be a good thing for those companies.
Relatively calm hurricane seasons in the last two years have also hurt the retailers, Credit-Suisse analyst Gary Balter said.
Both retailers historically receive bumps from hurricanes, with Katrina, Rita and Wilma in 2005 “having a measurable impact not just on near term sales trends but on rebuilding for nearly one year past the hurricane event,” he said in a research note.
Gustav, Hanna, Ike, Josephine and what is currently a tropical depression could lift sales for Lowe’s and Home Depot, he said,
“Among natural disasters, hurricanes rank as the most sales impactful because unlike major winter storms, earthquakes or tornadoes, they are predictable providing a sales lift on both sides of the event,” Balter wrote.
He did note that both companies keep prices and margins low during natural disasters, but the impact of rebuilding still works its way to the bottom line.
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The upscale home goods retailer, which operates the Williams-Sonoma, Pottery Barn and West Elm chains, reported higher-than-expected fourth quarter profit on Thursday, helped by an extra week of sales in the quarter compared with last year.