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financial
financial

January Sales Improve Over December

Same-store sales were lackluster last month but sector averages beat December’s dismal showing.

Buffeted by macroeconomic trends and consumer uncertainty, retailers turned in lackluster comparable-store sales results for January that ranged from some upside surprises to several dismal misses. But results showed a slight improvement in sector averages over December’s numbers. Overall, comps were in line with expectations.
 
Helped by a strong performance by the warehouse clubs, the mass merchant sector turned in average comp growth of 2.2 percent for January, versus a 1.1 percent average increase in December. Wal-Mart reported a monthly increase of 0.2 percent, missing expectations by a wide margin. Target declined 1.1 percent.
 
Department stores declined 3.6 percent on average in January, versus a 5.4 percent decline in December. Moderate department stores in particular lagged. Macy’s, Kohl’s and Dillard’s reported drops of 7.1, 8.3 and 12 percent, respectively. J.C. Penney’s decline of 1.9 percent beat expectations.
 
Specialty stores improved to a 1.2 percent average decline in January versus 3 percent decline the prior month. Chico’s showed the largest comps drop for the month, tumbling 22.1 percent.

Talbots reported a quarterly same-store sales drop of 6 percent and laid out plans to close roughly 22 additional stores in fiscal 2008, on top of the 78 Talbots Kids and Mens store closures already announced. About 10 to 15 of the stores are being considered for conversions to other concepts. The specialty retailer also said it plans to scale back its capital spending to $75 million in 2008, down from $83 million last year. New store openings will also be scaled back to roughly 46 new doors, down from the 75 new locations last year.

For more, see Friday’s issue of WWD.