etail sales sag for second month

New York— With consumers pinching their pennies as rising gas prices dig into disposable income, same-store retail sales remained broadly depressed for a second straight month during July, putting an awkward question mark over the prospects for the just-beginning back-to-school selling season.

Luxury retailers like Saks and Neiman Marcus drew affluent shoppers into their doors, posting double-digit gains in the process. And discounters and warehouse clubs also fared well, attracting bargain-hungry consumers. But most mall-based retailers — with the key exception of J.C. Penney — struggled throughout the month, with unseasonable weather compounding consumer malaise, chilling out sales of seasonal apparel and placing second-quarter profits in peril for many.

As the old bromide goes, "The rich will always be with us," and Neiman Marcus and Saks Fifth Ave. had plenty to cheer about because of it. Same-store sales raced ahead almost 17 percent at Neiman Marcus, and 12.8 percent at Saks Fifth Ave.

But reflecting the widespread doldrums becalming most big retailers, Saks department store group reported that same-store sales were virtually flat, edging up just 0.8 percent.

Discounters also did well, with Wal-Mart driving comps in its U.S. stores up 3.2 percent, and Target doing even better, with a 3.8 percent increase.

Doing even better, luring in pinch-penny customers, were low-price, no-frills warehouse clubs. Costco reported a gain of 9 percent in same-store sales, followed by Sam's Clubs at 7.7 percent and BJ's at 6.4 percent.

But with three notable exceptions — J.C. Penney, up a stellar 8.1 percent; Stein Mart, recovering with a 6.2 percent gain; and Federated, up a solid 3.7 percent — retailers targeting the nation's big middle continued to founder.

Among the big comp losers: May Department Stores, down 5.5 percent; Ross Stores, down 5 percent; Kohl's still stumbling, down 4.2 percent; Dillard's, down 3.5 percent; and Sears, down 2.6 percent.

The persistently weak retail sales caught Wall Street and investors off guard, and helped drive a steep 163 point drop in the Dow Jones Average last Thursday, the day retailers reported their monthly numbers.

Subdued sales also caused some retailers to re-evaluate their prospects going forward. In a conference call, Sears forecast a same-store-sales decline in the low single digits for the upcoming third fiscal quarter.

Sales of home fashions were mixed during July.

Home turned out to be a big winner for a number of key retailers. Dillard's said home fashions "significantly exceed the company's average sales performance." And James Baireuther, vice chairman of The Bon-Ton Stores, identified home as a winner, along with accessories and misses sportswear.

But elsewhere, Saks identified soft home as a weaker performer and Sears said, "Revenues in our home group were essentially flat." May said, "Although home décor product, luggage and mattresses achieved sales increases, the balance of home furnishings lagged behind overall store performance."