No Turn On Red

A few days late on this one, but July’s same store sales numbers came out on Thursday and the brightest spot was how well department stores did. Federated up 3.3%, JC Penney up 4.9%, Kohl’s up 5.9%, Nordstrom up 5.3%, and Saks up 2.4%. All of these beat or were in line with analysts predictions.

Mall retailers posted mixed results: Abercrombie & Fitch posted an increase of 3% (with A&F namesake stores up 1%, abercrombie kids up 5%, Hollister up 5%, and Ruehl up 36%), American Eagle Outfitters up 7%, Ann Taylor up 5.1%, Gap Inc. down 4% (with Gap nakesake stores down 13%, Old Navy & Banana Republic reporting flat sales, and Gap International stores down 6%), Hot Topic was down 7.2%, Limited Brands up 7.0%, and PacSun was down 10.6%.

Target was up 3.1% while Wal-Mart was up 2.4%. Costco was up 7.0% while BJ’s Wholesale was up 1.9%.

Interesting results as it seems shoppers are going to the department stores for their Back to School shopping. Department stores were up 4.1% this month compared with a 0.5% increase in July of 2005. Will this trend continue through August?

As I mentioned the other day, I’m not suprised to see flat sales at Abercrombie & Fitch namesake stores with stronger comp numbers coming from American Eagle Outfitters. But like I said, the real interesting numbers will be out next week with the Q2 results from these retailers.

Still think Gap can start a turnaround. Like I’ve said, I already like the new store experiences and merchandise from Old Navy and Gap. I think it will take longer to execute the turnaround and will be a prolonged process, lasting several seasons, before we really see any true signs of a turnaround. Q2 numbers are going to be ugly judging from the amount of markdowns I’ve seen at some of the Gaps and Old Navys that I’ve been in.

More coverage from Minyanville’s Retail Roundup, Investor’s Business Daily, and Reuters.

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The second half of last week was crazy busy for me. Let me catch up on a few of the stories I missed last week:

Fendi sues Wal-Mart over sales of fake handbags:

Italian fashion group Fendi S.R.L. sued Wal-Mart Stores Inc. in U.S. federal court on Friday, accusing the world’s largest retailer of selling counterfeit handbags and passing them off as genuine at its Sam’s Club warehouse stores.

Sam’s Club stores in California, New York, Florida and other states sold knock off handbags, wallets and key chains that were identified as “genuine” Fendi products, according to the lawsuit filed in U.S. District Court in Manhattan.

The suit by Fendi said that Wal-Mart has never purchased its products and never asked Fendi if any of the items bearing its trademark were genuine.

Having never stepped foot into a Sam’s Club, I’m suprised to even imagine that they would carry any Fendi products. This suit will be interesting to watch to see where the blame, if any, lies within Wal-Mart. Is this the case of an over-zealous buyer making sure they’re meeting “always low prices” or is this the case of Fendi not happy that their goods somehow ended up in Sam’s Club?

Good coverage in the comments over at Wake Up Walmart

More about the changes at Federated as the September transition to the Macy’s brand approaches. Here’s the rundown: Macy’s is the brand that people response to the most nationally, even if people in this article are negative about the loss of their regional department stores. Expect less promotions and increased private-label and exclusive offerings, as well as stores tailored to the region that they are in, so that Federated can maintain some of the things that people loved about all of the chains that they’ve swallowed up. Very informative article, though.

And lastly, two food-related quickies about two different chains who are being compared to Starbucks:

First is Dunkin Donuts, who are obviously competiting in the same space as Starbucks (in the sense that they both sell coffee). Boston.com has an article outlining the future growth plans of this chain. The plan calls for 15,000 U.S. locations in 2020, up from 5,000 today, and this will be done through a variety of store layouts and prototype as well as increased product offerings to drive afternoon business.

Is this all being done in an effort to compete with Starbucks? Not so much, it seems. As a loyal dunkin Donuts coffee drinker, I think that as much as these two brands concentrate around the same product (coffee), there is not too much overlap in their philosophy and themes, so I can see both of them co-existing pretty well in the world we live in. Seriously, though, whoever thought that there will be a day that we will live in a world with tens of thousands of locations of the same two stores?

The other eatery being compared to Starbucks doesn’t deal with coffee, but instead deals with ice cream.

USA Today has an article outlining the future growth of Cold Stone Creamery and the ice cream business in general. Two quotes that sum up this article really well are the following:

Cold Stone doesn’t just sell sundaes and sorbet, it sells sizzle. “It’s like Starbucks for kids,” says George Carey, president of Just Kid, a consulting firm.

and

An industry that once sold ice cream now is selling an ice cream experience.

Tonight I went to Friendly’s to get a large Reese’s Peanut Butter Cup sundae. I’m not concerned with the experience, I just want good ice cream. But with that said, it will be very hard for me to resist the new Cold Stone Creamery that they are building three minutes from my house.

That’s all I got tonight.

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The New York Times on the demise of the petite department in some department stores:

[...] the love affair with little women appears to be over. Three of the country’s most influential fashion emporiums — Neiman Marcus, Saks Fifth Avenue and Bloomingdale’s — have quietly eliminated or drastically scaled back their petite departments in the past several months, infuriating many longtime customers.

Given that manufacturers produce clothing in only a handful of standard sizes — among them, juniors, misses and plus size — the abandonment of petite sizes at the highest levels of American retailing represents a sea change in fashion, forcing some designers to either stop making special sizes for smaller women or re-evaluate how much to invest in the business.

More in today’s article, “Where’s the Petite Department? Going the Way of the Petticoat”

Is this a shift in trends or is this just a case of these three department stores missing the mark? As the Times points out, this may be a case of these stores missing the mark:

What did change is that petite departments gained a reputation for traditional — some would say frumpy — career-oriented clothing. Chic looks, clothing executives said, never made the leap from regular sizes to petite. So the very word petite became synonymous with many women who shopped there — working women over the age 50.

Over the past few years, other brands like JC Penney, Kohl’s, and Macy’s have upped the fashion offerings in their speciality size departments and have been met with positive trends. Walk into any of these stores today and you will see the traditional petite department, anchored by career-orientated clothing, alongside the more fashionable petite offerings. More so, these stores are also boosting their bottom line by offering this contemporary assortment under their private labels (see JC Penney’s a.n.a, Kohl’s apt. 9 & Sonoma, and Macy’s INC).

I don’t predict the downsizing of the petite department by Neiman Marcus, Sak’s and Bloomingdales is the beginning of a larger trend. JC Penney, Kohl’s, and Macy’s are still doing it right. Just because you are short, doesn’t mean you are also 50.

Besides, if a shorter woman can’t shop in your store – who’s to say she’s going to stick around to pick out clothes for her husband and her kids?

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