In a recent spate of about 30 headlines on Chain Store Age, it was bad news all around.
Here’s a sampling of headlines and synopses from Chain Store Age.
- Zale Posts 4Q Loss
- Sears 2Q Profit Plummets 62%
- Talbots’ 2Q Loss Swells to $25 Million
- Charming Shoppes Swings to 2Q Loss, Sales Slip
- Chico’s FAS Marks Another Down Quarter
- American Eagle Starts to Slide
- Stein Mart Sales Spiral Downward
- Report: Wilsons Closing Up Shop
- Ann Taylor 2Q Profit Falls 8%
The bright spot? Luxury and discount chains. To no one’s surprise, consumers who are paying more and more for fuel, groceries, and necessities, they’re seeking discount retailers for better, lower prices. While one example is not a trend, luxury retailers who cater to a clientele that may be less impacted by economic woes also seem to be faring better. Here’s a sampling of just a few headlines:
DSW 2Q Profit Up 68%
Columbus, Ohio (August 28, 2008) DSW Inc. said Thursday its second-quarter profit jumped 68% despite a drop in same-store sales.
The company said the catalog allows it to sell products to customers in all 50 states, not just the 23 states in which its 115 retail stores are located.
Tiffany & Co. Profit Almost Doubles
New York City (August 28, 2008) Tiffany & Co. posted a higher quarterly profit on Thursday, benefiting from strong international sales and solid tourist spending at its New York flagship store.
Dollar Tree 2Q Profit Rises 15%
Second-quarter profit grew 15% as consumers turned to the discount retailer amid a tough economy.
The company earned $37.6 million compared with a profit of $32.6 million in the same quarter last year. Sales rose 12.5% to $1.1 billion from $971.2 million.
Big Lots Reports Increased Sales and Improved Operations
The worst of economic times can yield the best of times for value-priced retailers, especially when the retailer has also improved operational efficiencies.
On Tuesday, Big Lots reported increases in net sales, same-store sales and income. In the second quarter, the close-out retailer’s net sales were up 1.9% to $1.105 billion compared to $1.084 billion for the year-ago period. Same-store sales increased 2.8%, which was on top of an impressive 5.2% increase in same-store sales for the same quarter in fiscal 2007.
And the shocker? GAP profits were up. But sales were still down which ultimately will hurt the chain and says they still have issues with the relevance of their merchandise mix.
Gap 2Q Profit Up 51%
Gap Inc. reported a 51% jump in quarterly net income on Thursday, beating Wall Street estimates, as cost-cutting, lower inventories and other moves that boosted profit offset declining sales.”
THE REAL WORLD RETAILING TAKEAWAY
It’s a mad mad mad mad world.
Unless you’re operating in the discount or luxury sector, I’m sure you’ve been impacted by the economic situation.
Take note: most of the stores listed that had increases in profits were tied to increased operational efficiencies, not increases in sales. That means they trimmed inventory, they cut payroll, and did everything they should be doing during tough economic times.