By Dhanya Skariachan

There’s nothing like a snazzy watch or a cool pair of sunglasses to  chase away those recession blues.
 
Despite the economic downturn, the U.S. accessories market has displayed some areas of growth, according to a report from market research firm NPD Group, with  watches and sunglasses being bright spots.

That could point to a trend where shoppers are not buying whole outfits, as they try to save money, but are drawn by powerful SALE signs to selectively snap up accessories to accentuate their old wardrobes. 

According to the NPD report, sales of men’s watches grew 20.8 percent in the fourth quarter of 2008 compared to a year ago, in stark contrast to the total accessories market, which saw a 26-percent decline.
 
“Watches continue to be seen as an investment purchase, at least by men,” said Marshal Cohen, an expert on consumer behavior and analyst with market research firm NPD Group.
 
While sales of watches to men of the 25-34 age group grew 1.9 percent, sales to the 35-54 years age group rose 8.5 percent.
 
Sunglasses have been the beneficiary of impulse purchasing, Cohen said, adding that NPD data shows nearly a third of sunglasses purchases were unplanned.  The top place for sunglasses’ sales was department stores. Sales of sunglasses rose 16.8 percent in that channel in the fourth quarter of 2008, according to the report.
 
“Even in a tough market, department stores ramped up their sunglasses assortment and put them front and center, and that really paid,” said Cohen.
 
Items like these may be indicators to, well, keep an eye on.
 
“Accessories was one of the last categories to post growth before this downturn and will likely be one of the first to return,” Cohen said.
 
(Photo/ Reuters)

Check out a persistent weakness in consumer attitudes.

On a scale of 0 to 100, where 100 is “very confident,” general economic perception of consumers fell to 36.7 in February from 38 in October, according to a survey by retail research firm NPD Group. The survey uses online answers from 1,000 people each month.

On the heels of worries over the economy, consumers’ intentions to shop also weakened. NPD’s study showed a more than five-point drop to 35.4 in February, compared to 40.7 in October.

“While a five-point drop doesn’t seem like much, it represents millions of dollars,” said Marshal Cohen, chief industry analyst at NPD.

U.S. consumers have held back on shopping in the past months as they contend with weak home values, tight access to credit and the fear of job losses in a recession.

But not all is lost.

NPD did note that although consumers’ confidence about the economy was fading, their worries about job security were leveling off. While the number of consumers most concerned about job security peaked in December at 38 percent from 33 percent in October, it fell to 34 percent in February.

“I think it’s premature to talk ‘recovery,’ ” Cohen said. “I think if we are able to spot signs of stabilization, we’ll be better positioned for recovery and then the return to growth.”

* From the Reuters Food and Agriculture Summit 2009, watch out for speakers including Sara Lee Corp CEO Brenda Barnes, Joe Sanderson, CEO of Sanderson Farms and CEO of Feeding America Vicki Escarra.

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(Photo/Reuters)

The terrible U.S. retail sales  racked up in December -- called a "horror show" by ING -- were all the more gruesome because of the sales on offer to customers in the run up to Christmas. Shops weren't exactly giving things away, but their generosity knew few bounds.

Consider the experience of one visitor to a heaving handbag department in a Maryland Macy's.
 
    Customer: "I would like to buy this handbag please. Oh dear, it appears to be the only one that is not on sale."
    Salesman: "So it is. Tell you what, sir, I'll give you 15 percent off anyway."

Happy customer, happy new handbag recipient, unhappy sales figures.

The slide opening VF Corp’s presentation at the ICR XChange Conference on Tuesday said it all: “These are unprecedented times … are you having fun yet?”

For investors and companies attending the two-day event in Dana Point, California, the answer was probably yes, given the 77 degree temperatures, sunny skies, view of the beach (and distance from the freezing weather in the mid-West and East of the country).

But the wider economic environment was at the forefront on everyone’s minds. On the opening day, apparel maker VF cut its fourth-quarter profit and revenue forecast, while athletic gear manufacturer Under Armour posted preliminary fourth-quarter results that were far below expectations.
 
Every retailer and apparel manufacturer presenting on the first day cited the difficult environment that has curbed the consumer’s appetite for apparel and footwear, with no near-term signs of abating. 
    
But most companies tried to remind investors of the rosy side of the equation in 2009, including apparel maker G-III citing lower overseas product costs, shoe and hat retailer Genesco talking about a “turnaround in the power relationship with landlords” and upscale clothing retailer J Crew, touting its new Madewell brand.
 
Also overheard and witnessed at the ICRXChange:
“You’re the man!” “No, you’re the man!” — J Crew’s Mickey Drexler and American Apparel’s Dov Charney in a mutual love-fest, each proclaiming their admiration for the other’s brand. 
 
During a panel on the purchasing tastes of teenagers, a female teen panelist offered her two cents: “I stopped shopping at Abercrombie because they’re so rude.” Much laughter from the room.

“Happy New Year — I think you all need some alcohol!” said Hot Topic’s Betsy McLaughlin, sporting black fingernails and greeting investors at her end-of-the-afternoon presentation where beers were served. The Goth-inspired apparel, accessories and music retailer recently raised its fourth-quarter profit forecast, making it a rare bird in the struggling sector.

Investors speculated on Steve Jobs’ health — three hours before Apple’s announcement Tuesday that he would take a medical leave of absence until June.

(Reporting by Alexandria Sage)

Check Out the continued pain in the retail industry.
 
Wal-Mart’s outgoing CEO, Lee Scott, said Monday that he expects the U.S. economy to remain extraordinarily challenging in the first half of the year and does not see anything that would turn it around quickly.
 
Scott likely wanted to deliver some brighter news in his swan song. He turns over the CEO post to Mike Duke on Feb. 1. However, the tone at the National Retail Federation’s annual conference in New York this week is likely to be bleak.

ShopperTrak predicted that U.S. retail foot traffic will fall 16.4 percent during the first quarter. The group, which monitors customer traffic, expects retail sales to fall 4 percent during the quarter.

Scott’s comments come just days after Wal-Mart, the world’s largest retailer, posted lower-than-expected December sales and cut its fourth-quarter profit forecast, showing it is not immune to the impact of the recession. Other retailers also issued profit warnings last week.
 
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(Reuters photo of sign at a Fishs Eddy store in New York in December)

Check Out mixed news on the retail sales front.

Retailers are now out to lure consumers with after-Christmas deals as data show this year’s holiday season was one of the weakest in decades.

The retail data service of MasterCard Advisors said U.S. retail sales fell as much as 4 percent during the holiday season. SpendingPulse tracks sales activity in the MasterCard payments network and couples that with estimates for other payment forms.

It found that luxury sector sales fell 34.5 percent, as job losses and stock market declines weighed on higher-end shoppers. Specialty electronics and appliance sales were off 26.7 percent.

But the news wasn’t all bad. Online retailer Amazon.com said this year’s holiday sales season was its best yet, with more than 6.3 million items ordered on its site on the peak shopping day of Dec. 15. Online sales were likely aided by winter weather in some parts of the United States.

Retail shares even turned higher on Friday — perhaps investors are more confident that it can’t get much worse?

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(Photo: Reuters)

Check out the winter wonderland.
 
As in, “I wonder if people are going to fight through the snow, sleet and rain this weekend to come to my store?”
 
A major storm headed for the Northeast could make things dicey for retailers on the last Saturday before Christmas, typically one of the biggest two shopping days of the year.
 
Retailers are hoping for a strong weekend to help lift what many analysts expect to be the worst holiday shopping season in about two decades.
 
But having just walked to work in Chicago, I can tell you that, depending on how this wintry mess hits the Northeast, consumers might have second thoughts about leaving their homes for the mall.
 
Planalytics, which measures the effect of weather on retailers, says the Northeast, lower Midwest and Great Lakes regions could see snow, sleet or freezing rain. On the West Coast, recent rainy conditions could continue to disrupt holiday traffic.
 
Along with steep discounts and extended hours, maybe retailer’s could offer door-to-door transportation.
 
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Peltz’s Trian reports 7.18 pct stake in Dr Pepper
 
Beauty joins holiday’s discount mania (WWD, subscription required)

(Photo: Reuters)

Florsheim mens shoes are reasonably classy. They were imortalised, for example, by snappily dressed Jack Nicholson in Roman Polanski's "Chinatown". He was rather distressed, film buffs will recall, by what a flood drainage canal did to them.

So it was something of a sign of the times last week that a visitor to a normally genteel Florsheim shoe shop in a Maryland mall got the hard sell from two salesman. Simply popping in to ask a question, our hero was essentially told -- firmly -- that he could not afford to leave without purchasing some footwear. The price was right, he was told.

No shoes were purchased, as it happens, but the pitch was nonetheless enlightening as a sign of desperation. The mall was relatively empty, despite cut down sales at nearly every shop. Very few people were buying, judging by the shopping bags. Sales staff everywhere looked pretty lonely.

Purely subjectively, but there were no signs at this particular mall of a seasonal spurt to spending in the world's leading economy.

Retailers say it can be difficult to measure their monthly sales results accurately on a year-over-year basis because of calendar shifts — sometimes a holiday falls in one month, boosting results, while the next year the holiday shifts into a different month, hurting results.

The most drastic case of this is usually seen in March and April, when the timing of the Easter holiday can help March sales and hurt April, or vice versa.

As monthly sales results came in today, numerous retailers, including Target, Saks, and Pacific Sunwear, said the timing of Thanksgiving (Nov 27 this year vs. Nov 22 last year) hurt their November results. The later Thanksgiving meant fewer busy post-Thanksgiving holiday shopping days in this year’s November period, they said, making sales figures look especially weak.

For instance, Target’s same-store sales fell more than 10 percent. It had warned that the calendar shift eliminated 7 holiday shopping days from November and pushed them into December, which would drag down November’s results. Saks and Pacific Sunwear also reported lower November same-store sales.

But the Thanksgiving shift was apparently not a big deal for industry leader Wal-Mart. While most retailers reported a drop in November same-store sales, Wal-Mart posted a stronger-than-expected 3.4 percent rise.

And in contrast to many others, Wal-Mart’s November monthly reporting period ended on Nov. 28 — Black Friday. That meant the discount behemoth had just one post-Thanksgiving day in November compared with most retailers whose November reporting periods ended on Nov 29 — giving them two supposedly busy post-Thanksgiving shopping days in the month.

Looks like low prices on food and toiletries are one way to trump a shifting calendar.

(Photo: Reuters/Nicole Maestri taken in a Wal-Mart store in Secaucus, NJ the week of Thanksgiving)

Check out some cautionary comments about how much weight to put on Black Friday sales reports.
 
The comments come from the Goldman Sachs U.S. economic research group and repeat caution the firm has given in the past about the much-hyped kickoff to the holiday shopping season.
 
1. “Shoppers are not sales.” Essentially, Goldman Sachs notes that just because people are in stores, it doesn’t mean they are buying something.
 
“Over the years, Black Friday has become a cultural event; people go not just to shop but to be a part of the broader experience, which could cause an increase in traffic that bears little relation to consumer spending,” the Goldman team wrote. 

2. “Sales are not profits.” Retailers were offering deep discounts to get consumers into stores on Black Friday, discounts that could hurt profits.
 
3. “One day is not the holiday season.” The team notes that the correlation between data on Black Friday and the entire holiday season has been historically poor.
 
Thanksgiving also came late this year, so there are fewer shopping days between then and Christmas.
 
“Simply put, with less shopping days each one has to be better for the overall holiday shopping season to be strong,” the Goldman Sachs team wrote.
 
Want to keep track of the holiday season as it unfolds for retailers? Check out the Reuters Holiday Shopping page here.
 
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Sears Holdings posts loss, plans store closures
 
Staples posts higher than expected profit
 
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(Reuters photo)