Citigroup retail analysts held a call with the media to discuss their outlook for this year’s back-to-school season and, as we’ve been hearing, there are few bright spots on the horizon.

Deborah Weinswig, who covers retailers including Costco, Wal-Mart and Nordstrom, said Citi expects back-to-school same-store sales for those retailers to fall 3 percent to 4 percent.

That compares with a gain of 0.9 percent last year.

“This is the first year since at least 1995 that we are projecting a decline in back to school same store sales,” she said. “In addition, if back-to-school sales don’t materialize early we believe that retailers could become very promotional in an attempt to drive traffic and sales.”

She said Citi’s proprietary back-to-school survey found that 45 percent of consumers plan to spend less for this year’s new school season than they did a year ago. The survey found that most consumers plan to buy apparel (75% vs. 79% last year), while the second most common purchase is expected to be a personal computer (15% vs. 19% last year) –although, as you can see, the percent planning to buy in both categories is down year-over-year.

J.C. Penney is one of Weinswig’s top picks for back to school - helped mainly by the fact that they have very easy comparisons to a year ago when sales fell.

Kimberly Greenberger, another analyst, said she is cautiously optimistic for improving sales and profit trends for the back to school season for softline retailers, or chains like Aeropostale and Pacific Sunwear. Greenberger said she was bullish on the outlook for American Eagle Outfitters and Urban Outfitters.

She said Urban Outfitters is a best-in-class retailer, while American Eagle Outfitters is showing improved product execution and faces easier sales and margin comparisons.

(Photo: Reuters)

Wannabe vampires can now suck up some “Twilight” love — ummm, read fashion — at department store Nordstrom. The retailer has announced a deal with Summit Entertainment for an exclusive clothing and jewelry collection inspired by the upcoming film “The Twilight Saga: New Moon.”

“Twilight,” of course, is the smash hit movie romance ($382 million global box office) about a teenager (Bella Swan) and her forbidden love for a vampire (Edward Cullen) and all the blood-sucking complications that can bring. “New Moon” is its sequel, due in theaters this November.

Shoppers can find their plaid tunics, “Team Jacob” T-shirts or “I love Edward” heart pendants starting October 1. The collection, created by Awake Inc, “reflects the mood and spirit of the film,” according to a press release. Prices range from $32 for a T-shirt to $58 for a jacket.

An Entertainment Weekly blog described the line as “supercute” but bemoaned the lack of life-size cutouts of heartthrob Robert Pattinson (Edward) in a suit for sale. That’s him at right with Kristen Stewart (Bella).

Nordstrom is also holding events in stores in advance of the release of the second installment of the vampire saga, including advance screening parties, and has launched an online countdown on a special website.

But if you’re trying to re-create a bare-chested werewolf look, don’t go to Nordstrom — there’s no love there. You’re on your own.

(Photo: Reuters)

Check Out J.C. Penney’s new store in Manhattan.

On July 31, J.C. Penney will open its first Manhattan store in the midtown area, promising to deliver trendy yet affordable items for New York’s notoriously savvy shoppers.

Penney is taking direct aim at rival Macy’s, whose flagship Herald Square store is a block away.

In fact, the department store chain, which signed the lease for the space in December 2007 just as the U.S. slipped into recession, hopes the store will give its sales a much-needed boost and help it snag some of the city’s higher-income shoppers, just when they may need it most. 

“I think they will be glad to save some money too, don’t you, especially if they are bankers?” Penney District Manager Pete Sadler said during a walk-through of the store ahead of its opening later this month.

The store, located inside the Manhattan Mall at 34th Street, occupies a space that once included a food court.

The 153,000 square foot store is smaller than some other J.C. Penney stores and stocks merchandise ranging from women’s clothing and accessories to home goods. It has a Sephora makeup boutique, and fine jewelry store and will even deliver to people’s homes for a $15 charge.

Texas-based Penney is using the store opening to launch two exclusive brands — Joe by designer Joseph Abboud and Cindy Crawford Style home goods — as it tries to draw shoppers with the promise of affordable but special merchandise.

But even before the launch, the Joseph Abboud line was already on sale. Sadler was unsure why, but speculated that it could be in keeping with a storewide discount drive.

An opening event on July 31 will feature an appearance by Mayor Michael Bloomberg, fashion events and prize giveaways, Sadler said.

But for consumers who are not penny pinching that much, Nordstrom is planning to open its first Nordstrom Rack store in Manhattan’s Union Square next year.

Also in the basket:

Pepsico posts stronger-than-expected profit

Whirlpool beats views; cost cuts offset weak sales

Altria profit rises; beats Street view

Starbucks brews up profit beat

P&G drug unit closer to sale - (WSJ) 

(Photos/Reuters)

Check out the ten largest U.S. retailers.

The National Retail Federation’s STORES magazine is out with its annual ranking of the top 100 retailers.

The list shows that U.S. consumers have been focused on bargains and basic necessities, such as food and medicine.  Wal-Mart tops the lineup, followed by Kroger and Costco.  Home Depot fell from No. 2 in 2007 to the fourth spot in 2008 as many shoppers decided to cut back on costly home-improvement projects.

Home Depot, Lowe’s and Sears Holdings were the only members of the top 10 to see their revenue fall in 2008.

Some other rankings that may interest you: Amazon.com is the 19th largest retailer, ranking higher than well-known chains such as J.C. Penney, 7-Eleven and Gap.  Apple’s stores and iTunes combined hold the 40th spot, topping chains such as Nordstrom, Whole Foods and Barnes & Noble.

The companies were listed by annual revenue, which may include estimates for private or closely-held companies.  Revenue from major non-retail operations were excluded when possible.

Also in the basket:

General Mills profit tops view, outlook strong

Constellation Brands earnings beat expectations

Goldman raises Yum Brands to buy

Turf War at the Hot Dog Cart (New York Times)

(Reuters photo)

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.

There were some bright spots, though: if you ignore gasoline sales, Costco Wholesale saw same-store sales rise one percent, and BJ’s Wholesale rose 4 percent.  And for apparel, Buckle Inc’s more casual teen market shopped the company’s same-store sales up 13.4 percent.

Even TJX, owner of TJ Maxx and Marshall’s among others, saw higher customer traffic translate into company gains even in the face of fluctuating international exchange rates.

With all of that in mind, it’s important to note that Wal-Mart ceased to report monthly sales as of April, giving some investors headaches, and others a chance to focus on smaller company’s sales data.

Also in the basket:

Signet profit up; Harry Winston beats view

L’Oreal sees 2009 market flat to slightly growing

(Reuters photo)

Premium jeans are a chic — and profitable — addition to department stores when consumers flush with cash are willing to shell out over $200 per pair. But when the economy goes south, stores and shoppers start to balk.
    
On Tuesday, VF Corp, maker of 7 For All Mankind jeans, said that brand’s total business was down about 10 percent in the quarter, thanks to the weak U.S. wholesale environment.
    
“It is absolutely a piece of the market that has been most challenged in this economy and that is the more premium luxury sector,” Chief Executive Eric Wiseman told analysts in a call following the release of first-quarter results, which were lower than the year-ago quarter.
    
7 For All Mankind competes with a small group of premium brands including True Religion, which announces quarterly results in early May.
    
The brand is sold in specialty shops, some of which are shuttering their doors in the recession, and upper-tier department stores, including Nordstrom, Bloomingdale’s and Saks Fifth Avenue.
 
“You see their comps so you see how they’re struggling right now to get traffic into the store,” Wiseman said.
    
VF’s international jeans business, too, is struggling for a good fit with the global economy. 
    
The company, which makes Wrangler and Lee jeans sold around the world, said it was lowering its full-year earnings guidance in large part due to “a severe contraction” in the economies of Scandinavia and Eastern European countries, where jeans are apparently not at the top of the shopping list.

Check out a stream of extremely sobering news from – and for – retailers.

This week, quarterly reports came in from Macy’s, Kohl’s, Nordstrom, JC Penney, Charlotte Russe, and Abercrombie & Fitch.

What did they all have in common? All reported profit drops and in the case of Macy’s and Charlotte Russe, quarterly losses.

Those dreary results followed a bankruptcy filing by Circuit City at the start of the week and then a large profit warning from competitor Best Buy.

Wal-Mart, the retailing behemoth, was able to post a nearly 10 percent rise in its quarterly earnings. But investors were somewhat taken aback when it provided a fourth-quarter earnings forecast that could possibly fall below Wall Street expectations, as it gets hit by a stronger U.S. dollar — which lowers the value of its international sales.

To cap it all off, government data showed on Friday that sales at U.S. retailers suffered a record decline in October. Sales slumped 2.8 percent last month to a seasonally adjusted $363.7 billion, the largest decline since the series began in 1992, the Commerce Department said. This compared with a revised 1.3 percent fall in September, previously reported as a 1.2 percent decrease.

It all comes just two weeks before retailers try to get consumers into their stores — and then actually spending money — during the Thanksgiving holiday shopping week. Get ready for a discount bonanza!

Also in the basket:

Wal-Mart CFO: strong dollar could lower cost of goods

Walmart.com CEO says sales grow despite downturn

Americans teetering on $14 trillion debt pile

(Photo: Reuters)

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)

Check out disappointing September retail sales

Many U.S. retailers posted worse-than-expected sales at stores open at least a year on Wednesday, and some cut their profit outlooks and said things won’t improve anytime soon as consumers remain shaken by the financial crisis, job worries and the housing slump.

Discounter Wal-Mart Stores and warehouse clubs managed the best sales performances in September as shoppers sought bargains on necessities. Wal-Mart, the world’s biggest retailer, stood by its third quarter earnings forecast.

Apparel retailers and department stores were particularly hard hit, and even luxury chain Neiman Marcus said consumer demand will stay weak for an extended period. Kohl’s, J.C. Penney and Nordstrom cut quarterly profit forecasts.

The results could further subdue expectations for the 2008 holiday season, expected to be one of the weakest in recent years.

Also in the basket:

Costco quarterly profit rises

August pending home sales jump

Car makers seen betting on electric vehicles

(Photo: Reuters)