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Shares in the nation's department stores fell Friday amid concerns that the sector would post sluggish July sales results on Thursday.
Macy's Inc.'s stock was down almost 3 percent, or 54 cents to $18.27, while J.C. Penney Co.'s shares fell more than 2 percent, or 69 cents, to $30.15 in afternoon trading. Upscale Nordstrom Inc.'s slipped 9 cents to $28.65, while Saks Inc., which operates Saks Fifth Avenue, slipped 8 cents to $10.11.
The nation's retailers are slated to announce same-store sales, or sales at stores opened at least a year, on Thursday. But there's growing concern that results will be below already modest expectations as a challenging economy continues to hurt shoppers, who are focusing on necessities, not nonessentials like apparel.
Furthermore, rebate checks that have helped discounters' business did little to lift sales at apparel stores. Analysts wonder whether shoppers — dragged down by high food and gas prices — will pull back even more once the benefits from the checks fade.
Same-store sales are considered a key indicator of a retailer's health.
"We believe that sales at the department stores were lackluster owing to the lack of fashion newness and a challenging macro environment," Citigroup Investment Research analyst Deborah Weinswig said in a report Friday. In contrast, Weinswig believes that discounters and wholesale clubs fared well because of their low prices and emphasis on food and other basics.
July is one of the least important months of the retailer's calendar because it is used to clear out summer goods to make room for back-to-school merchandise. But analysts say that the month provides a good glimpse of consumers' willingness to spend on back-to-school items. Sluggish sales at department stores last month also don't bode well for second-quarter earnings, which will be released in the next week or so.
© 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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{"commentId":2357788,"authorDomain":"neysa2000"}
Why are the department stores whining? I can't imagine why they are blaming their slump in sales on the economy. Good, and fair, business practices should solve their sales problems (in my opinion). People, like myself, are plain old tired of the department stores exorbitant finance charges. You would have to go to a pay day loan company to top the department stores finance charges. These charges make it almost impossible for their customers to pay their accounts down, or off.
My experiences with department stores are that even if you buy something that's on sale you'll still pay, and pay, and pay if you ever want to own the product out right. With interest rates that continue to climb higher and higher, are one of the true causes for their sales slumps (at least for a large part). I have been dealing with one very well known department store for more than 20 years and because I was recently late making my payments on 2 occasions they raised my interest rate from approx. 19%+ to more than 23%. No, I wasn't a week late, not a month in making my payments. My payments were 1 day late on one occasion and 2 days late on another occasion. I was very ill and just couldn't make it to the store on the payment due dates for 2 months in succession.
Now, this department store will continue to charge me the higher interest rate as long as I maintain my account with them. Also, when I pay this account off, close the account, and ever re-open an account with them, I will still be charged the higher interest rate. Also, they charged me an exorbitant late fee on both occasions. If this is how these department stores plan to continue doing business, I will not make any further purchases from them. I have spoken to other people about their feelings on this subject matter and everyone has agreed with me - it's not worth doing business with them. Some of these people are willing to make cash purchases from this and other department stores. But, I am not interested in making credit, or cash, purchases from this department store again, now, or in the future.
I know that many of their customers believe they have no other option than do business with these department stores. But, more people are learning that it is not worth paying the high costs on their purchases to buy high priced products and also be billed 23% and higher % rates for giving their business to these department stores. If we don't have the cash, we will just have to do without whatever the product is. We feel that we are being cheated on all counts by doing business with these department stores. There was a time that the department stores didn't charge interest and they even sent you postage prepaid envelopes to send your payments to them. Well, that ended so long ago that I can't recall when they stopped.
These Department Stores make 100 - 300% + profit on almost every item they sell. When they made the decision that it would be good and fair business practices to add on the high interest rates to their already high prices I don't know. But, at some point, it seems they should have anticipated a loss of customer sales and their revenue.
Therefore, my advise to these department stores is to suck it up and take it just like their customers have been doing for decades! Maybe, in the future, new department stores and even some of the current department stores will decide that greedy success only leads to ultimate losses in the future.
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#1 - Sun Aug 3, 2008 11:22 PM EDT{"canLink":false,"threadId":"325202","isPrivate":false}
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