Moving in the Right Direction

Jennifer Marks, Editor-in-Chief -- Home Textiles Today, 2/8/2010 12:00:00 AM

After passing through the initial round of winter trade shows, I kept thinking of the Beatles song in which Paul McCartney chirps: “It's getting better all the time” and John Lennon pipes in: “It can't get much worse.”

The optimism we heard at Heimtextil largely held through Atlanta, Las Vegas and New York — and appears to be growing a bit less guarded than it was previously.

Over the coming months, retailers will anniversary against some really lousy 2009 sales numbers. Last week, as the January sales volumes were announced, Macy's, Kohl's, Ross, TJX and Jo-Ann Stores all raised their outlooks. In addition, TJX and Costco beat Wall Street's estimates for the month.

In the monthly report, home was cited as a strong performer by TJX, Target, Costco, Bon-Ton, Ross Stores and Stein Mart.

The Johnson Redbook Same-Store Sales Index in January rose 3.0% – its strongest showing since June 2008 (not a typo), when the Index rose 3.5%. January was also the sixth consecutive month in which the Index posted a gain. In Redbook's sample of 40 broadline and apparel retailers, 59% reported positive comps last month.

In its breakout by channel — apparel, department stores, discounters, warehouse clubs, drug and miscellaneous stores — only drug stores reported a decline. A year ago, every channel except drug saw comps plunge.

The arrow is moving in the right direction.

Obviously, the situation isn't all sunshine and roses. Unemployment claims increased again in the last week of January when they had been expected to fall. On the positive side, 31 states saw their unemployment claims drop by more than 1,000, but 306 of 372 U.S. metro areas saw their unemployment rates climb.

No surprise then that retailers large and small remain very mindful of pricing and inventory levels. The good news is they are increasingly focused on items that are new and distinctive, suggesting they believe there is some consumer appetite out there to stimulate.

Between Valentine's Day, Super Bowl and President's Day sales, retailers ought to be able to generate some heat in February.

If this is indeed the famous U-shaped recovery we heard so much about last year, it feels like we've started the climb.