The Forever Sale: Retailers Slow Pace of Markdowns

In addition, comparisons are fairly easy, as Slater noted. He said the retail group faces a 1.4 percent comp in May (except Wal-Mart) and that specialty stores are up against a negative 7 percent in May, while department stores cycle negative 3.1 percent in May.

Macy’s staged a 25 to 75 percent off storewide sale with an extra 15 percent off coupon for selected items. Bloomingdale’s offered an extra 40 percent off almost all permanently reduced women’s fashion, making for 50 to 75 percent off, and 25 to 40 percent off swim, sandals and a selection of designer handbags. Nordstrom started its traditional half-year sale at 33 percent off and higher for select items.

Henri Bendel offered up to 60 percent off a large selection of apparel and accessories.

However, major retailers don’t expect price promotions to reach the levels they did late last year. “I certainly don’t anticipate the kinds of aggressive markdowns we were seeing last fall, largely because you don’t have the same kind of supply-and-demand situation,” Saks’ chairman and chief executive officer Stephen I. Sadove said last week, while the store’s president and chief merchandising officer Ron Frasch added, “Markdown dollars were very much in control. We have been very cautious with the promotional portion of our business. We have every hope of running a normal pattern of promotions this quarter.”

Earlier this month, Macy’s ceo Terry Lundgren said retailers have returned a “pretty regular promotional cadence,” similar to spring 2008. “Supply and demand is back in order again.”

Michael Celestino, executive vice president of stores at Barneys New York, characterized the Memorial Day weekend’s business as “pretty much on par with the trend for the season.”

As far as Barneys’ private sale offering 40 percent off selected merchandise for a week through Memorial Day, Celestino said, “We got a good response. It was what we expected. People are still being motivated by sale. The private sale pretty much followed the normal cadence of our markdown strategy at this point. Items and percentage [discounts] were pretty normal with what we typically do in a normal season.” Barneys will run final markdowns in July in advance of its warehouse sale in August.

Even on Madison Avenue, where the designer business is hurting and customers aren’t satisfied with markdown levels, there is some light ahead. Shipments are coming in earlier than a year ago, potentially spurring traffic. “Our stores are ready for newness,” said Diane Levbarg of Missoni. “Ninety percent of all pre-fall Missoni is ready to be shipped, in time for the beginning of June. I am very pleased with our production department in Milan.”