Retailers buoyed by after-Christmas rush

By Andrea Lillo -- Home Textiles Today, 1/12/2004 12:00:00 AM

NEW YORK —

Following several weeks of nail-biting as retailers awaited sales of a slow-starting season, December ended on a welcome note as consumers shopped up to Christmas, as well as the week after.

Snowstorms paralyzed several regions nationwide, as well as spending during the first half of the month. The anticipation of a robust holiday may have also fueled disappointment. However, the industry ended the month with a 3.7 percent increase, according to Redbook Research.

Warehouse clubs performed the best in December, leading the group in comp store increases. Costco reported a jump of 11 percent and BJ's Wholesale Club followed with 6.6 percent.

Sam's Club placed third on the chart with 6.1 percent, while Wal-Mart overall had comps of 4.3 percent. Wal-Mart division had comps of 3.9 percent. The company had double-digit growth in total sales, up to $33.657 billion.

"If not for the two snowstorms during the first half of the month, we believe that comparable club sales would have been at the high end of our guidance of 7 percent to 9 percent," said Mike Wedge, president and CEO, BJ's. Sixty-five percent of its store base is located in the Northeast, where the snowstorms hit.

Sales at Target Corp. were in line with expectations, thanks to the final two weeks. "Sales at both Target Stores and Marshall Field's were on-plan for the month, while sales at Mervyn's were well below plan," said Bob Ulrich, Target chairman and CEO. Domestics was one of the strongest merchandise categories at Target, which posted comp store sales of 5.6 percent. However, home was one of the weakest at both Marshall Field's and Mervyn's, which saw a comp sales decreases of 1.7 percent and 6.3 percent, respectively.

Sears reported a decrease of 0.8 percent for the month, as well as one for home fashions and household goods in the mid single digits.

"A surge in last-minute shopping and post-holiday clearance activity were not enough to overcome soft comparable store sales in early December," said Alan Lacy, Sears chairman and CEO. "Shoppers attracted by holiday promotions and clearance bargains caused many merchandise categories to rally as the season progressed."

The Great Indoors' comps fell in the mid teens.

Federated was pleased with its monthly performance, which slightly exceeded the higher end of prior guidance.

TJX was also happy with its monthly results. "As we expected, the holiday selling season came late this year and our sales surged toward the end of the month," said Ted English, president and CEO. "Our strategy of flowing fresh merchandise to our stores right up until the holidays served us extremely well. We ended December with our inventories in excellent shape and are very pleased with the strength of our merchandise margins."

TJX's MarMaxx division, which comprises T.J. Maxx and Marshall's, had a comp increase of 1 percent, though its home fashions category was flat. Its HomeGoods division was also flat, while increases were seen at Winners and HomeSense in Canada, up 25 percent, T.K. Maxx, up 16 percent, and A.J. Wright, up 3 percent.

Kohl's comps dipped 1.2 percent in December, though total sales climbed 12.8 percent to $1.84 billion. "We are very disappointed with our December sales performance," said Larry Montgomery, CEO. "The business came very late in the month and at deeper discounts than planned."

December sales for major retailers
Total chain sales, including all merchandise departments, for period ending 1/3/04a
Sales in $millions