news: luxury report

LUXURY DEPARTMENT STORES LEAD THE WAY IN OCTOBER AS HOPES RISE FOR A GOOD CHRISTMAS

By WGSN Newsteam, 05 November 2010
A good October for US high-end department store sales gave further hope for a happy Holiday as customers looked to be in the mood for spending, particularly on autumn fashion merchandise.
Neiman Marcus led the way in October with its comps jumping 11.5% as demand for womenswear accessories, particularly handbags, footwear and jewellery, all increased. Its strongest sales trends were from stores in Texas, the Northeast and Southeast.
Over at Nordstrom, comps last month rose 3.4%, beating analysts’ expectations of a 2.7% hike. Total retail sales jumped 9% to $662m. Q3 comps increased 5.8% and totals lifted 11.7% to $2.09bn.
The strongest categories in October included jewellery, dresses and women's shoes. It said sales grew the most in the Northwest and Northeast, while California stores remained weak.
Sales from its store division, which includes Neiman Marcus and Bergdorf Goodman in New York, increased 9.5%. Direct sales (online and catalogue) leapt 21.4% after the retailer expanded its online services.
JC Penney’s October comps suffered a bit of a blip, however, dipping 1.9%. Year ago comps fell 4.5%.
For the four-week period total sales slipped 3.3% to $1.27bn.
Sales of fashion jewellery, luggage, housewares, and beauty products, through its expanding Sephora offer, continued their positive sales trend for the month.
Overall, shoes and men’s apparel were the top performing divisions. In addition, sales of Liz Claiborne merchandise continue to perform very well, ahead of expectations, attracting new customers.
Geographically, the best performing regions were the northeast and southwest regions, as compared to the central and northwest regions where unseasonably warm temperatures hit autumnwear sales
Saks totals lifted 6.4% to $233.9m as comps impressed with an 8.1% hike, boosted by a promotional event shift from November to October.
Strongest categories at Saks Fifth Avenue stores were women’s shoes, womenswear, men’s sportswear, and beauty. Saks Direct performed well during the month, it also noted.
For Q3, totals rose 4.3% to $649.6m with comps up 5.7% for the quarter. Saks said it continues to expect comps sales growth in the mid-single digit range for H2.
Macy’s reported total sales increased 6.8% to $1.807bn as comps rose 2.5%.
“While we experienced some softness in sales early in October given the unseasonably warm weather, we ended the month with a strong trend going into the Holiday selling season. Customers have reacted positively to the launch of our unique Holiday gift-giving merchandise and newness in fashion.
"We also launched our latest exclusive brand relationship with Kenneth Cole Reaction men’s sportswear, now sold only at Macy’s.
"Overall, we are pleased with our sales performance in the third quarter and the continued results of major strategies including our My Macy’s localization initiative. Bloomingdale’s sales continued to be strong in October and the third quarter,” said CEO Terry J Lundgren.
Q3 total sales increased 6.6% to $5.624bn and comps rose 3.9%.
For Q4, the retailer said comps are expected to be up 3-4% and up 3.3-4%, in H2, up from 3-3.5% expected back in August. Based on stronger sales expectations, Macy’s also increased its H2 earnings guidance to $1.50-$1.55 per share, excluding expenses, from $1.45-$1.50 previously.
Bon-Ton comps slipped 4.2% in October, hurt by unseasonably warm weather denting demand for winterwear. Total sales fell 4.4% to $214.2m.Some of the strongest performing categories included footwear, dresses and cosmetics.
For Q3, comps dropped 0.3%, with total sales down 0.5% to $700.5m.
Dillard's comps dipped 1% in October, in line with analysts’ expectations while mirroring a slight decline in overall sales for the month to $356.1m from $361.7m last year. Year ago comps were down 8%.
Junior's and childrenswear sales were strong, while home merchandise and furniture sales were weak. Dillard's said stores in the eastern region did better than average, while central and western stores were weaker.
Q3 sales fell below expectations for the period as total revenue rose to $1.32bn from $1.31bn last year, while comps rose 1%.
Kohl’s total sales for October dipped 1% as comps decreased 2.5%.
For the quarter, totals increased 4.1% and comps rose 1.8%. Year to date, total sales increased 7.4% and comparable store sales increased 4.4%.
CEO Kevin Mansell said the retailer witnessed a strong performance in the second half of the month, partially offset by unseasonable weather affecting sales in the first two weeks.
The West region reported the strongest results for the month.
“The footwear business again reported the strongest comparable store sales… Our e-commerce business continues to report strong growth,” he said.
It expects Q3 EPS of $0.57-$0.58, consistent with the low-end of its previous guidance of $0.57-$0.63 per diluted share.

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