Shop Talk

Retailers, consumers and prices

Check Out Line: This week in retail wasn’t pretty

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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 PenneyCharlotte 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.

Manolo Blahniks for cheap(ish)

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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 Line: Tough Month for Retail

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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.

retail12.jpgDiscounter 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.

So goes Wall Street, so goes Fifth Avenue retailers

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santasaks.jpgThe fallout from the turmoil on Wall Street will be felt by retailers who have set up shop on one of Manhattan’s most prestigious avenues – Fifth Avenue.

In the past week, Lehman has failed, Merrill Lynch agreed to be acquired by Bank of America, and the government had to step in to keep giant insurer AIG from failing.

Nordstrom contemplates taking Manhattan

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nordstrom.jpgUpscale department store Nordstrom continues to have trouble finding a suitable site to open its first Manhattan venue.

Seattle-based Nordstrom said Thursday it wants to expand into one of the world’s most lucrative markets. But the high price of island real estate and lack of appropriate venues has hampered efforts, Nordstrom’s Chief Financial Officer Michael Koppel told analysts at the Goldman Sachs conference.

Check Out LIne: Mixed profit outlooks

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nordstrom.jpgCheck out retailer’s different views on future profits.
 
Kohl’s, the mid-priced department store, says it expects third quarter earnings to be better than expected, while upscale Nordstrom cut its forecast range.
 
That’s not to say that Nordstrom’s consumers are flocking to Kohl’s as the U.S. economy suffers. Kohl’s profit fell in the second quarter. But cutting inventory was enough for it raise its profit estimate for the full year. Deutsche Bank retail analyst William Dreher also said the company will be able to set itself apart with fresh merchandise because it cleaned out its inventory.
 
Nordstrom, meanwhile, cut its full-year profit outlook. But while its customers are spending less, the retail chain says they are not trading down.
 
And if they were, they certainly aren’t trading down to J.C. Penney, which saw a 36 percent drop in profit and forecast third quarter earnings below analysts’ estimates. Sales also fell 2.5 percent.
 
Also in the basket: 
 
H&M defies retail gloom as July sales top forecast
 
Swatch upbeat on H2 as Olympics boosts sales
 
Back-to-School discounts are deeper, more creative (N.Y.Times)

 (Photo: Reuters)

Check Out Line: Even Neiman Marcus feels the pinch

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bergdorf.jpgCheck Out lower quarterly results at Neiman Marcus — the latest in a string of results proving that high-end stores are running into the same trouble as their lower-tier peers.  

The company, known for its namesake and Bergdorf Goodman stores, said on Wednesday that quarterly sales fell almost 1 percent to $1.06 billion, while net profit fell nearly 7 percent to $55.4 million.

Check Out Line: Dillard’s drive-by profit plunge

Check out Dillard’s plunging profit.

In case you missed it, the department store chain operator reported a 94 percent drop in quarterly profit after the closing bell on Thursday.

“The weak economic conditions, particularly in Florida, made it extremely difficult to achieve profitable sales levels,” Chief Executive William Dillard said in a statement.

Soaring gas sinks Goldman’s view of retailers

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highgas.jpgWhat does gas at $4.50 a gallon mean for some mall-based department stores?

A downgrade by Goldman Sachs.

Goldman sharply raised its forecast for oil prices in the second half of this year, saying it expects U.S. crude to average $141 a barrel, up from a previous projection of $107. Goldman also forecasts prices will rise further next year to average $148.

That is not good news for retailers.

“Higher energy spending in the second half is likely setting the stage for a more challenging backdrop for consumer discretionary sectors, particularly for the department store stocks,” Goldman noted.

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