DM Provides Some Relief in Poor Holiday Season

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Retailer laments run long this holiday season: sluggish same-store performance, a compressed selling period with Thanksgiving falling a week later than in 2001, a lack of strong apparel trends to drive mall traffic and consumers worried about the economy and possible war.


But among all the poor numbers, the direct marketing and Internet divisions often showed the most strength.


"On the catalog side of our business, which includes Internet sales, we generated above-plan results for December, and our early spring catalog that was mailed in late December tracked ahead of plan," said Margie Myers, spokeswoman at The Talbots Inc., Hingham, MA.


Overall, Talbots' sales in the five weeks ended Jan. 4 fell 3 percent to $201.9 million from $207.6 million in the five weeks ended Jan. 5, 2002. Comparable-store sales dropped 9.1 percent in the month.


Home furnishings specialty retailer Restoration Hardware Inc. said online and catalog sales rose 19.9 percent this holiday vs. 2001 while comp-store sales for the nine-week period to Jan. 4 were up 1.8 percent vs. 7.1 percent in 2001.


At Jos. A. Bank Clothiers Inc., comp-store sales for December were up 5.4 percent, but combined Internet and catalog sales were 31.6 percent higher.


Store revenue at Sears, Roebuck & Co., Hoffman Estates, IL, for the five weeks ended Jan. 4 was $4.1 billion, down 2.6 percent from the five weeks ended Jan. 5, 2002. Comparable-store revenue fell 4.6 percent.


Though it did not disclose numbers, Sears said its newly acquired Lands' End division "exceeded expectations" and that Sears.com revenue saw a "doubling [over] last year's levels."


JC Penney Co. Inc. was one of the few department store chains with any good store numbers, with comp-store sales for November and December 3 percent higher. E-commerce sales rose 20 percent, but its catalog sales fell a whopping 23.7 percent.


Federated Department Stores Inc., Cincinnati, had sales of $2.77 billion in the five weeks ended Jan. 4, nearly unchanged from $2.79 billion in the prior year. On a same-store basis, December sales fell 2.6 percent.


Slow sales of gifts and jewelry halted luxury retailer Neiman Marcus Group Inc.'s progress. Five-week sales through Jan. 4 fell 2.8 percent. But catalog sales were up 2.6 percent, mainly because of sales of furniture, linens and decorative home items -- all indications of a nesting trend among consumers. Horchow was the star performer among its three direct brands.


Tiffany & Co. fared slightly better. U.S. comp-store sales were 1 percent higher for the November-December period. Direct marketing sales increased 11 percent to $57 million. Combined catalog and Internet revenue was up 20 percent because of e-commerce sales, though business sales slumped 3 percent.


Limited Brands reported flat comparable-store sales for the five weeks ended Jan. 4, but Harry A. Ikenson, managing director at First Albany Corp., said direct sales at its Victoria's Secret division were up.


"Victoria's Secret Direct was up 13 percent in sales for the month of December, and that was above plan," he said. "Internet sales were up significantly within that overall number, and merchandise margins were up for the period that ended in early January vs. the period that ended in early January of 2002."


One of the worst performers was The Spiegel Group, Downers Grove, IL. Comp-store sales for its retail division slid 8 percent for the five weeks to Dec. 28, while direct sales plunged 27 percent.


"We had a significant decrease in circulation. We also had more restrictive credit-granting measures that had an impact on sales, and there was also the overall economic environment," Spiegel spokeswoman Debbie Koopman said. "It was a double-digit decline in circulation in Spiegel and Newport News catalogs year over year for the fall season."


Spiegel recorded sales of $371.8 million for the five weeks ended Dec. 28, down 17 percent from $447.8 million in the five weeks ended Dec. 29, 2001. Comparable-store sales for its Eddie Bauer division fell 6 percent in the five weeks, and sales results by division for December were down 7 percent at Eddie Bauer, 25 percent at Newport News and 41 percent at Spiegel Catalog.


Not even e-commerce could help Spiegel as online sales were flat for the month vs. last year.


An increase in mailings by The Bombay Company Inc. helped raise the company's nonstore revenue -- including Bailey Street Trading Co., international, mail order and the Internet -- from 3 percent in the five-week 2001 holiday period to 5 percent this holiday season.


"We did increase circulation by about 50 percent in December compared to the same month a year ago, and we also had a postcard mailing in December that we didn't have last year," Bombay spokeswoman Elaine Crowley said.


Same-store sales rose 18 percent in the five weeks ended Jan. 4, and total revenue increased 23 percent to $98.8 million.


Other results include:


* Same-store sales at Toys "R" Us dropped 1 percent, but Toysrus.com reported sales of $179 million, up 12 percent this holiday vs. the year-ago period. It shares that revenue with Amazon, which manages Toysrus.com.


* Online sales at Sharper Image for the first 24 days of December grew 68 percent, besting catalog and infomercials' 36 percent growth and stores' 7 percent for the comparable periods.


* Internet-only retailer Buy.com Inc., while not disclosing sales percentages, said it received 35 percent more orders this holiday season vs. last. Traffic was also up more than 33 percent to 130,000 shoppers daily compared with last year.


* Revenue at J. Crew Group Inc. for the five weeks ended Jan. 4 was $132 million, up from $124.6 million in the five weeks ended Jan. 5, 2002. Comparable-store sales fell 6.1 percent but sales for the direct division increased 11.9 percent to $47.8 million, including $26.1 million in Internet and $21.7 million in catalog.


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