Holiday Sales Hold Their Own, All Things Considered

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Catalogers and retailers provided mixed reports regarding holiday sales as they concluded a year that will be remembered for the recession, anthrax contamination of the mail and the Sept. 11 terrorist attacks.


J.C. Penney Co. projected a 5 percent increase in December sales at stores open at least one year, better than its previous forecast of 3 percent to 4 percent. However, Federated Department Stores Inc. announced that same-store sales will be off 9 percent to 9.5 percent, though that is an improvement on a previously anticipated 11 percent to 14 percent drop. Sears, Roebuck & Co.'s same-store sales through Dec. 29 are reportedly on plan to be 5 percent or just below.


Specialty gift retailer RedEnvelope met its goal of doubling its holiday sales by enlarging its catalog and increasing circulation. Along with doubling holiday sales over last year, RedEnvelope said it set several company records this season, including its first million-dollar day, its one-millionth gift shipped on Dec. 14, and a 30 percent rise in traffic to its Web site to 1 million users for the month.


The company increased its catalog circulation 40 percent to 6 million this year, including three separate, larger holiday catalogs mailed at the start of November compared with one last year. It also increased its customer base from 250,000 last year to 750,000. Proprietary merchandise represented 50 percent of sales from both the catalog and Web site. The company shipped 250,000 packages this year, up 67 percent from last year.


Sharper Image Corp.'s total company business for the five days ended Dec. 24 increased more than 10 percent from the same period last year.


"We're especially pleased that the increase in business is being accomplished with margins that are improved over last year," said Richard Thalheimer, founder, chairman and CEO. "We have managed our inventories exceptionally well during what has generally been regarded as a difficult retail year."


The Sportsman's Guide Inc. said it expects to report sales above expectations for the quarter ending Dec. 31. Sales are expected to be $60 million to $62 million, higher than the current analyst estimate of $57 million as well as the $59 million reported for the same quarter last year.


"There is no question that we are experiencing one of the strongest quarters in our history," said Gregory R. Binkley, president/CEO of the South St. Paul, MN, company. "Sales are now expected to come in above the high end of our plan, and we anticipate ending the year without bank borrowings and with well over $5 million of cash on the balance sheet."


The company's Internet-related sales are expected to be "well over" 20 percent of total fourth-quarter sales. Internet-related sales amounted to nearly 30 percent of total sales recorded during the week before Christmas.


Pier 1 Imports also raised expectations for fiscal fourth-quarter earnings and reported a double-digit increase in its December sales. Same-store sales increased 14 percent for the month. It forecast that sales for fiscal December, which ends Jan. 5, will increase 8 percent to 10 percent compared to a year ago.


Last month, Pier 1 reported third-quarter sales of $387.3 million, up 12.8 percent from $343.5 million in 2000 and sales at stores open at least one year increased 5.1 percent during the quarter.


In the online realm, sales during the fourth quarter totaled $9.6 billion through Dec. 23, excluding travel, according to ComScore Networks Inc., which reported that $260 million of that was sold Dec. 12, the Internet's busiest shopping day of the year. Projected sales are expected to total $10.5 billion, 15 percent above last year's numbers. Internet sales will account for 1 percent to 2 percent of retail sales this season and are expected to increase as retailers continue to improve their Web sites and delivery service.


While there was concern that the terrorist attacks could lead people to avoid stores, only 19 percent of consumers restricted themselves to online purchases as 48 percent shopped in stores and online.


Also, the burst of the dot-com bubble destroyed the idea that e-tailing would do away with brick-and-mortar stores and leave shopping malls empty. While Internet usage continues to increase at 6 million new households a year, according to Jupiter Media Metrix, New York, consumers are increasingly using the Web for research and price comparisons at "real-world" stores as much as for buying items directly online.


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