Business

<< Previous   of   Next >>   ADVERTISEMENT   CONTACT THE HERALD Mike Benbow, Business Editor benbow@heraldnet.com   Published: Friday, September 5, 2008 Shoppers wait for deals on clothing Associated Press NEW YORK -- When it came to buying their children new jeans and trendy tops, parents held the line: They focused on basics at discounters and waited for the best deals, resulting in weak August sales at many stores. That's a bad sign for the holiday season as families may be just as cautious with their gift-giving. Even lower gas prices may not offer retailers much relief in the months ahead as shoppers are still seeing personal incomes fall and food prices remain high. In fact, Wal-Mart Stores Inc., the world's largest retailer, as well as warehouse club operators such as Costco Wholesale Corp. remain among the few bright spots as shoppers focus on the lowest prices. "Consumers are feeling pressured economically," said Stifel Nicolaus & Co. analyst Richard Jaffe. But he added that what's also hurt the back-to-school business is the lack of new trends to excite teens. "What you have in your closet is certainly adequate. And that's not satisfying for retailers and teens," he added. "The fear is that they stay in flip-flops." Ken Perkins, president of research company RetailMetrics LLC, agreed that shoppers remain focused on price. "I don't see anything changing anytime soon. Parents are still going to buy for Christmas, but it is definitely going to be less than last year." As retailers reported their sales results Thursday, most mall-based apparel stores turned in sluggish results. Teen retailers that fared poorly included Wet Seal Inc., Abercrombie & Fitch Co. and American Eagle Outfitters Inc. And high-end retailers Saks Inc. and Nordstrom Inc. posted weaker results as their affluent customers start to feel pinched. The International Council of Shopping Centers-UBS sales tally rose 1.7 percent in August, below the 2 percent forecast. Excluding Wal-Mart, the results were flat compared to a year ago. Last month's pace was below the 2.3 percent average since the beginning of the industry's fiscal year in February. The tally is based on same-store sales, or sales at stores opened at least a year, and are a key indicator of a retailer's health. A report from the Labor Department offered more evidence of the weaker job market, a bad sign for consumer spending. The number of workers seeking unemployment benefits jumped unexpectedly last week, reversing three weeks of declines. Such reports aren't comforting to retailers as they prepare for the critical holiday season. Many had entered the fall season with inventories well below their levels a year ago, but that backfired at several stores including TJX Cos., Wet Seal Inc. and Bon-Ton Stores Inc. All three were hurt by having too little clearance merchandise, cutting into sales to bargain-hunting consumers. One encouraging factor is that Hurricane Gustav, which hit the Gulf Coast on Monday, wasn't as bad as analysts feared -- and that sent oil prices even lower. Gas prices have fallen from more than $4 a gallon to a national average of $3.678 on Wednesday, but remain well above the year-ago figure of $2.792, according to AAA and the Oil Price Information Service.

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