Retailers, consumers and prices
Check out the latest sales reports, which show that consumers are still cutting back on discretionary spending as they shift to discounters for the basics. Granted, that’s not exactly news anymore, but some of this morning’s sales tell us that even the discounters are starting to feel the heat.
“Sales for the month of May were somewhat below our expectations,” chief executive officer of Target, Greg Steinhafel, said in a statement.
He’s not alone.
Big boxers such as Target and BJ’s Wholesale reported steeper than expected drops in same-store sales, suggesting that the recession may have depended further than the luxury market.
Speaking of which, upscale department stores, such as Nordstrom and Neiman Marcus, saw sales slip while Macy’s fared slightly better than analysts had expected. Abercrombie & Fitch, known for their strong hold on the younger markets saw same-store sales slide 28 percent, worse than the decline analysts had expected. And teen/tween sensation Hot Topic, saw same-store sales fall 6.4 percent which were, again, steeper than analysts had predicted.
In a wake-up call to the industry, a new survey shows that customer satisfaction with online retailers declined 3 percent from last year.
Metro AG, Germany’s top listed retailer, plans to cut 15,000 jobs or about 5 percent of its global workforce by 2012 amid a broader restructuring program, a source close to the company told Reuters on Tuesday. The company, which owns supermarkets and department stores, employs about 300,000 people in 2,200 stores across 32 countries.
Neiman Marcus chief Burt Tansky had some choice words for retail reporters last night, saying they had unfairly influenced the outcome of the 2008 holiday shopping season well before it even started. He was referring to stories that came out as early as September, like this one, predicting that holiday sales could be the worst in up to two decades because of the bad economy.
“I think the media have done us a terrible disservice,” Tansky said at an evening event sponsored by Financo Inc during the annual National Retail Federation conference in New York, attended by our own Karen Jacobs. “The media, I think, should start thinking about the impact they are having on retail.”
Many of these media stories were based on predictions from leading research groups, such as Deloitte, who gave gloomy forecasts due to the global financial crisis, the U.S. housing slump and credit crunch.
And when retail chains finally began to take down the tinsel after the holidays, their performance proved even worse than that, with sales dropping for the first time in the nearly 40 years they have been tracked.
We didn’t know it last night, but Tansky may have had other reasons to be piqued than our role in bringing the bad news. Neiman today said it would start making interest payments on some of its senior notes by issuing more debt, rather than using cash, and planned to fire 3 percent of its workforce.
The news comes barely a week after Neiman posted a 31.2 percent drop in same-store sales at its unit that is home to the Neiman Marcus and Bergdorf Goodman stores.
Outlet malls are known for their low prices, but the discounts being offered this weekend at Woodbury Common Premium Outlets in Central Valley NY, roughly 45 miles north of Manhattan, were truly eye-popping.
From Geoffrey Beene to Izod to Van Heusen, store windows were plastered with signs offering 40 to 60 to 75 percent off:
Check out how the rich aren’t all that different from the rest of us after all.
They aren’t spending any money either — at least that’s how it looks according to the earnings for upscale department store Neiman Marcus.
Revenue fell 13 percent to $986 million in the first quarter, which ended Nov. 1.
Operating profit, excluding one-time items, fell almost 50 percent.
The results are not necessarily a surprise. Unlike other recent economic slowdowns, luxury retailers have been hit this time around, too.
But the earnings do serve as a reminder that this recession is a falling tide that grounds all boats.
Also in the basket:
Office Depot closing stores, distribution centers
Stores build up cash to weather the storm (WWD, subscription required)
Luxury lives! At least when it’s on sale.Today’s Manolo Blahnik sample sale brought out New York fashionistas looking for fabulous shoes on the cheap, and given the woeful state of the economy this year, they need it more than ever. The sale is typically held twice a year and is not widely publicized. Shoes that typically priced from $545 to over $1150 for tall suede boots were on sale from $100 for a simple pair of pumps to $400 for over-the-knee boots. Manolo Blahnik sends out an e-mail to their best customers and press friends, such as Vogue editors, who then tell their friends, and thus the word gets out.Most shoppers at the sale told us they will still buy luxury items like expensive shoes. But they are being more cautious and buying less these days.Cynthia Tabet of New York City said she buys new Manolos “every year,” but this year bought fewer pairs. “You’re tempted, but not as much” since the stock market tanked, she said. Tabet’s still on the fence about holiday purchases and is waiting to see if the economy picks up before buying.Picking through the piles of Manolos, Maria Jaqez of NYC also said she was “more cautious than usual,” but expected her holiday shopping to be “the same as last year.”Throwing caution to the wind was Tina Rich, also of NYC. The Cartier employee said she didn’t care about the ups and down of the stock market. “I’m just a little person, it doesn’t effect me!” she said cheerily, as she scooped up several pairs of pumps. “I wear Manolo’s and Dolce, that’s it.”(Photo/Reuters)
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.