Bargain shoppers turned out en masse across the land on Friday morning to observe Black Friday rituals, while retail temples from Target to Macy’s to Saks slashed prices to get people to do one simple thing: buy more stuff.

But upscale stores — and some their shoppers — seemed to think the Black Friday extravaganza beneath them.

I got a sense of this while I was interviewing people outside Saks’s flagship store on Manhattan’s Fifth Avenue this morning. I asked a customer exiting with a Saks bag full of merchandise what she thought of the sales. She sniffed:“I’m not here for Black Friday. All the stuff I bought was full price!”

Peter Bertling, a lawyer visiting from Santa Barbara, California, had a different point of view about discounts. “I hadn’t planned on buying a suit,” Bertling said as he left Saks. “If not for the Black Friday sale, I’d probably be at the hotel with my wife right now.”

While Saks discounts many items by 40 percent between 8 a.m. and noon on Friday, other upscale rivals seemed to the think holiday discounts were déclassé. At 9 a.m. on Friday, while Saks and Tiffany were open, other upscale stores that line Fifth Avenue, such as Cartier, Versace, Prada, Piaget and even Bergdorf Goodman, were closed.

(Photo: Reuters)

Check out more retailers reminding Wall Street that all is not well on Main Street.

On Friday morning,  AnnTaylor Stores reported lower-than-expected quarterly revenue and gave a cautious forecast for the current holiday quarter.

The operator of the Ann Taylor and Ann Taylor LOFT chains said its fourth-quarter sales would be slightly below those of the third quarter, and that its gross margins would be lower as well, due to heightened promotions it expects to use to drive sales throughout the holiday shopping period.

Meanwhile, Foot Locker late on Thursday reported third-quarter results that missed Wall Street expectations. The athletic shoe retailer cited lower than expected U.S. sales.

On a conference call on Friday morning, Foot Locker said it expected same-store sales for the holiday fourth quarter to be negative.

Foot Locker and AnnTaylor join a chorus of retailers ranging from Macy’s to Kohl’s to Wal-Mart that have warned investors in recent weeks that the holiday shopping season may be a little less merry than the stock market is expecting as consumers continue to show a reluctance to spend.

Or as Doug Scovanner, the CFO of Target, said quite pointedly earlier this week: “In our view, sell-side analysts are somewhat more optimistic across most of our industry than we believe is warranted in light of the harsh realities of the current environment.”

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(Photo: Reuters)

Companies that cater to consumers are always chasing after the latest consumer technology trend (anyone remember Second Life?), and this holiday season that means following them into the world of social media.

Companies ranging from Wal-Mart and Panda Express to J.C. Penney and Target are experimenting with Facebook, Twitter, YouTube or Flickr. Some are tweeting special coupons or limited-time deals, while others are doling out fashion advice or providing play-by-plays from product launch parties on Facebook. M.A.C. said it is using its Facebook page to feature artists, color collections, and what is happening backstage at fashion shows. 

While figuring out if all this tweeting, posting and friending is increasing sales is difficult, companies said one thing is certain: Social media is giving them a direct, unfiltered link to consumers.

For instance, when Target asked its Facebook fans what they thought of its mens clothing line, they got suggestions like: “MORE MLB, NFL, NBA merchandise…” and “Could use a better selection of mens jeans, and tall mens shirts (not just dress shirts) too.”

Target is now using the responses to tweak its merchandise selection.

When Panda Express wanted to celebrate its new SweetFire chicken breast, it allowed Facebook fans to print a coupon so they coud visit a restaurant on Sept. 25 and try it for free. Chief Marketing Officer Glenn Lunde said 25,000 coupons were redeemed and traffic in its restaurants rose that day. 

Larry Weintraub, the chief executive of marketing agency Fanscape, said that unlike traditional media, social media can give companies tangible results.

“If I run a TV ad or I do a billboard … I don’t always know the direct effect,” he said. “If I do Facebook and there’s a coupon or a direct link to buy it, I actually see the results.”

Coach said it is luring shoppers to its stores and its website by using Facebook, Twitter and establishing relationships with influential blogs. For this holiday, it is developing an iPhone gifting application. Users can type in who they are shopping for, what that person’s favorite color is, and their price range. The application will respond with a bundle of possible gift ideas.

But Zain Raj of Euro RSCG Discovery said companies need to keep social media’s potential in perspective for this holiday. He pointed to Dell, which has said it raked in more than $3 million from Twitter followers who clicked through its posts to its Websites to make purchases. 

However, Raj said that is “not even a drop in the ocean” for a company that posted $12.3 billion of revenue in the first quarter of this year, alone.

(Photo/Reuters)

Check out Mattel reporting a smaller-than-expected decline in third-quarter revenue as the toymaker sees gains in its Hot Wheels and American Girl brands.

Profit fell to $229.8 million, or 63 cents a share, from $238.1 million, or 65 cents a share, a year earlier.  Net sales fell 8 percent to $1.79 billion.  Analysts expected revenue of $1.78 billion.

Chief Executive Robert Eckert said Mattel’s revenue was still under pressure due to the weak economy, a move by retailers to tightly manage inventory and a dearth of toy lines tied to movies and other entertainment.

“That said, we are continuing to make strong progress on reducing costs, rebuilding margins and generating strong cash flow,” he said in a statement.

Mattel and rival Hasbro are facing another tough holiday as key retailers Wal-Mart and Target have already begun offering steep discounts on their products to woo shoppers.

After a bruising holiday season in 2008, toy companies are making fewer and more affordable products, such as those that cost less than $30. Mattel’s Barbie “Fashionista” doll is expected to be a hot seller this holiday.  It sells for $11.99 at Toys R Us.

Hasbro will report earnings on Monday morning.

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(Photo: Reuters)

You know how it is when you take a trip to Target: You're going to buy just that ONE THING that you need, and you're going to keep it cheap. As you leave the store, you wonder how you dropped hundreds of dollars on things that you didn't realize you needed until you walked into the store.

Target is hoping to spawn a similar phenomenon on its website, where it has begun offering a magazine newsstand. Rather than starting from scratch, it has signed on Zinio, a digital publishing company that offers magazines and books from more than 350 publishers.

Zinio will sell electronic versions of magazines on a page on Target's website, either as single editions of current and older issues, or as annual subscriptions - usually at a discount. People can read them in a Web browser version or through an application that Zinio offers for download. This is similar to what they've done on other websites, like the one operated by Barnes & Noble.

Yes, you can already look at online versions of magazines, Zinio Chief Executive Richard Maggiotto said in an interview. This is different, however, he said: "It's a high-fidelity, robust magazine." In other words, these titles, ranging from Elle to Woman's Day to Seventeen, are meant to look -- if not feel -- like the print magazines they are replacing. Zinio and Target will share the revenue they get from each sale.

Maggiotto declined to reveal specific goals, but said that he would be happy to see 1,000 or more new subscriptions (a month) come in during the first year of the Target partnership. So far, he said, Zinio sees about 60 percent of its magazine sales coming from archival or current issue sales, and about 40 percent from subscriptions.

This might not be such big news on most other days, but it is coming after some cataclysmic events transpired in the magazine industry. With ad sales suffering, big publishers such as Conde Nast are cutting workers and titles, making some media experts wonder whether the good times are over forever. Digital revenue has failed to make up for print revenue losses, just like in the newspaper world. But every little bit helps, right? Apparently so. Maggiotto would not say who Zinio's next partners are, but said that "there are 10 more in the queue."

(PS: Apologies to Tom Waits for stealing one of his lyrics for the sake of a headline. It's from "Nighthawks at the Diner." The photo is all Reuters)

Check out the quickly shifting media landscape putting retailers’ ad strategies at risk.

In a research note this week, Credit Suisse analyst Michael Exstein examined what changes in the media world mean for retailers who are used to reaching consumers through traditional channels — like the newspaper.

In the past five years, there has been a modest shift from print toward digital media, but Exstein warned that: ”We may in effect be reach a ‘tipping point’ where past media strategies will no longer be sustainable.”

Promotional national retailers that cater to a younger demographic and rely on national media to communicate to customers may be most exposed to changes in the media landscape, he said.

“This is a particularly acute problem for retailers that are used to (some would say dependent on) driving sales and marketshare through promotions such as Target, Kohl’s, Macy’s, and JCPenney,” he said.

“How will they promote in the future if the Sunday newspaper can not be counted on to distribute an insert or an television network can not be counted on to deliver an audience at a specific time/day?”

Retailers like Target that have a large number of younger shoppers — shoppers who rarely, if ever, read a newspaper and instead spend large amounts of time using Facebook or Twitter – there is less time to respond to the changing way consumers consume media, he said.

But retailers with older demographics – like Bon-Ton, Dillard’s, JCPenney or Macy’s – may have the advantage of at least being able to follow the lead of other retailers, who will need to move swiftly to respond to the shifting media landscape.

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(Photo: Reuters)

Check out analysts’ calls on middle and upper income shoppers.

Thursday’s sales reports showed that some consumers have started to buy their little luxuries again, a trend retail industry experts say is crucial for sales to rebound this fall and winter.

Michael Koskuba, Portfolio Manager for Victory Capital Management’s Victory Large Gap Growth Fund, recommended that investors look into discount names with a discretionary bent, such as Target, which he owns in his fund.

“We thought, well, if things do start to improve they’ll be a beneficiary of that, and clearly we’ve seen the outperformance in the stocks,” Koskuba said of Target shares compared with those of Wal-Mart Stores Inc so far this year.

“The discounters in general, especially the ones that do have the discretionary component to them, I think are the one that will continue to do well,” he said, citing companies such as Target and off-price retailer TJX.  “I think those are sort of the areas that investors should be focusing on.”

Still, low-income consumers alone cannot ensure a retail recovery.

“While we believe market share gains for the discounters are likely to persist as the consumer remains focused on value and as the savings rate remains elevated relative to recent years, we are more positively disposed toward retailers in our coverage addressing the middle-to-upper-income consumer,” said William Blair analyst Mark Miller.

Michael Niemira, chief economist of the International Council of Shopping Centers, said he noticed encouraging trends in Thursday’s reports, such as Costco selling more televisions (albeit at a lower average price).

“You say, well, TV sales are deferrable, but that’s a discretionary purchase.  So there’s something beneath the surface that is, I think, a little bit more positive,” Niemira said. 

He expects a broader group of retailers to start posting positive sales results by the end of the year, and not just because they face easy comparisons since the end of 2008 was so abysmal.

“Even luxury will be participating in that,” Niemira said.  “I don’t think you can have a sustained consumer recovery without the luxury component strengthening.”

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(Reuters photo)

Check out the latest news on U.S. retail sales.

The trend was pretty much the same as it has been lately — most chains posted declines in August sales at stores open at least a year, or same-store sales.

However, many declines were not all that bad and there were a handful of increases, which could be a sign that consumers are really back to shopping.

Target and Gap, for example, posted drops that were not as steep as anticipated.  Aeropostale and TJX both saw sales rise more than expected.  Still, others fell short.  Abercrombie & Fitch, Rite Aid, Children’s Place and others were among those whose sales declined more than Wall Street predicted.

Now all eyes turn to what demand will be like for the holiday season.  Sure, it’s still summer, but it’s getting chilly out there.  We’re sure retailers would love it if you went out and bought a new sweater or coat.  Or five.

(Reuters photo)

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Check out the recession. It appears it was still alive and well at Saks in the second quarter.
 
The upscale retailer posted a $54.5 million loss in the quarter, wider than the $32.7 million seen a year earlier.
 
Same-store sales fell 15.5 percent in the quarter and Saks expects that measure to fall in the mid-to-high single digits in the second half of the year.
 
The company has been cutting expenses and controlling inventory. The loss also was not as bad as analysts expected.
 
But unless a Versace dress becomes the “must-have” back to school item, the tough sales environment at Saks is likely to continue.
 
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Target profit falls, but beats Wall Street view

(Reuters photo)

Check out Target already looking forward to the 2011 holiday season.

The discount retailer said it is taking control of Target.com and aiming to launch its new website by the 2011 holiday season.

The announcement signals the end of a relationship with online retailer Amazon.com that began in 2001.

“We believe it is in Target’s best interest going forward to assume full control over the design and management of Target’s e-commerce technology platform, fulfillment and guest services operations,” Target.com President Steve Eastman said in a statement.

Target had previously extended its contract with Amazon to 2011, but the companies will continue to work together during the next two years.

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(Photo: Reuters)