Disappointing holiday sales for US retailers

ON A DAY when many US retailers’ November same-store sales exceeded analysts’ estimates amid a rush of holiday shopping on Black Friday (the day following Thanksgiving), Kohl’s, JC Penney and Gap disappointed.

Sales fell 6.2 per cent at Kohl’s, 2 per cent at JC Penney and 5 per cent at Gap, all trailing the average of analysts’ estimates.

JC Penney said the decision not to join rivals and open at midnight on Thanksgiving hurt sales, while Gap cited competition from a promotional environment. These results and consumers waiting for discounts to make purchases will make it difficult for retailers to lure shoppers before Christmas, and that could hurt sales, said David Bassuk, head of the global retail at consultant AlixPartners.

“December is still highly questionable,” he said. “The consumer is now trained to buy on promotion, and they are smart enough to wait for that next big sale.”

Kohl’s fell 6.7 per cent at 1.36pm in New York. JC Penney dropped 0.2 per cent. Gap advanced 0.9 per cent. Same-store sales for the more than 20 companies tracked by Retail Metrics rose 3.2 per cent last month, exceeding the estimate of a 3.1 per cent increase, as 11 chains surpassed projections. Luxury retailers such as Saks and Nordstrom topped estimates as stock market volatility failed to deter wealthy shoppers from spending.

“High-end consumers aren’t feeling as good as when the stock market was at 14,000, but they are feeling reasonably good and they are out shopping,” said Saks chief executive Steve Sadove.

Gap’s same-store sales decline, which includes online revenue, was led by a 7 per cent drop at its Old Navy chain, the San Francisco-based company said. Gap’s total comparable-store sales have declined for five straight months.

JC Penney opened its shops at 4am on Black Friday, while Macy’s, Target, Kohl’s and Best Buy opened earlier, at midnight. The earlier starts helped draw a record amount of shoppers on Black Friday, according to the National Retail Federation. For the entire Thanksgiving weekend consumers spent a record $52.4 billion (€39 million), 16 per cent more than a year earlier. By not opening at midnight, JC Penney gave away sales to competitors.– (Bloomberg)