An article recently posted on WSJ, written by Elizabeth Holmes, illustrates how wise planning on the part of apparel retailers led to strong January sales as they quickly moved clearance items, making room for their spring merchandise. Clothing retailers proved their business savvy over the recent holidays season by keeping their inventories lean and not budging on discounts. Deal hungry consumers were left seeking marked-down products in the new year, said Ken Perkins, president of Retail Metrics Inc. Because inventories were so tight, shoppers gobbled up a majority of discounted goods in the first two weeks of the year then moved directly on to spring-related items which sold for full price.
The smart planning resulted in the largest sales increase in almost two years. And while this may not indicate that consumers are ready to spend on the same level as they were prior to the recession, it does show that retailers and consumers are starting to understand where the market is at. “You can say you are in a challenging position and have a tough set of circumstances surrounding you,” Macy’s Inc. Chief Executive Terry Lundgren said, discussing the current climate, “but at least you can forecast where the future is going to be."
According to Thomson Reuters and Retail Metrics Inc., retail sales at stores (open at least one year), not including Wal-Mart, rose 3.3% in January 2010, year over year. January proved to be the , "icing on a cake that had already been baked,” said Todd Slater, an analyst for Lazard Capital Markets. To highlight a few companies in particular, Macy’s gained 3.4% in same-store revenue for January mostly due to diminished clearance merchandise, which increased full-priced sales. American Eagle Outfitters Inc. reported an increase of 10% in same-store sales for January while Children’s Place Retail Store Inc. saw 12% gains. Of the high-end retailers, Nordstrom Inc. was at the top with gains of 14%. One of the most surprising success stories of January was Abercrombie & Fitch Co. which reported same-store sales gains of 8% after analysts forecasted an 8% decline.
These January figures point to the overall importance of offering bargains to shoppers. Some of the most positive figures came from discount retailers such as TJX Cos, operator of Marshalls and T.J. Maxx, which posted an increase of 12% in same-store sales. Kohl’s Corp. reported 6.5% gains while Old Navy saw gains of 10%.via Wall Street Journal