Retail Bulletin

RAPAPORT...

U.S. Retail Sales Slip
U.S. retail sales decreased 3.8 percent in June, unadjusted, compared with last year and were down 0.2 percent seasonally when adjusted month to month, according to a statement from the National Retail Federation (NRF) that cited the U.S. Commerce Department. “High unemployment and other uncertainties will continue to impact consumer spending through the remainder of this quarter,” Rosalind Wells, NRF’s chief economist, noted.

U.S. Department Store Sales Decline
Department store sales in the U.S. fell 9.4 percent during June to $15.4 billion, based on U.S. Census Bureau data. The department store segment’s total sales for the first six months of the year dropped 7.7 percent to $84.5 billion.

For the month of June, the U.S. Census Bureau estimated that total retail sales declined 9 percent to $342.1 billion, while retail sales for the first half of 2009 dropped 9.8 percent to $1.99 trillion.

Saks Incorporated reported that its total sales fell 4 percent to $230.2 million and that its same-store sales also decreased 4 percent. Neiman Marcus’ sales declined 19 percent to $323 million, with same-store sales down 21 percent. Sales at Nordstrom fell 6 percent to $686 million, while its same-store sales decreased 10 percent. Sales at Macy’s, Inc. declined 9 percent to $2 billion in June, with same-store sales also down 9 percent.

J.C. Penney Company said that its June sales fell 7 percent to $1.5 billion and that its same-store sales dropped 8 percent. Kohl’s Corporation’s June sales declined 2 percent to $1.5 billion, with same-store sales down 6 percent. Dillard’s sales decreased 16 percent to $497.2 million and its same-store sales fell 14 percent.

Sales at BJ’s Wholesale Club, Inc. dropped 5 percent to $1 billion and its same-store sales declined 8 percent, with the company listing its jewelry department among the weaker performers. Costco Wholesale Corporation reported that its sales were down 4 percent to $6.9 billion, while its same-store sales decreased by 6 percent.

U.S. Jewelry CPI Rises
The consumer price index (CPI) for jewelry in the U.S. rose 0.8 percent year on year to 154.93 points during the month of June, according to statistics provided by the Bureau of Labor Statistics (BLS). While the month-to-month change was minor, the index has now topped 150 points for 17 consecutive months. Prior to its current run, the index had not hit 150 points since February 1998. For the watch and jewelry categories combined, the index for June inched 0.9 percent higher than one year ago to 147.64 points. The monthly index is based on a reference point of average prices in 1986, which is set at 100 points.

Finlay Misses Interest Payment
As predicted in its last quarterly report, Finlay Enterprises failed to make a semiannual interest payment of $1.7 million that was due on June 1, 2009 to the holders of Finlay Jewelry’s senior notes. Finlay Jewelry does not intend to make the interest payment, according to a statement filed by the company with the Securities and Exchange Commission (SEC) after the lapse of a 30-day grace period. Finlay also reported that board member Rohit M. Desai resigned.

Birks & Mayors’ Sales Shrink
Sales at Birks & Mayors fell 26 percent to $53.6 million during the quarter that ended June 27, 2009, the jeweler reported. Same-store sales dropped 20 percent during its first quarter of fiscal 2010, comprising a 26 percent decline in the U.S. and a 13 percent decline in Canada. The firm attributed $4.3 million of the revenue drop to currency exchange rates between Canada and the U.S.

For the 2009 fiscal year, Birks & Mayors’ sales fell 14 percent to $270.9 million, while its same-store sales also fell 14 percent. The chain reported a net loss of $61 million for the year that ended March 28, 2009, compared with profits of $10.4 million one year ago. Net sales during the year included an $11.7 million charge associated with the strengthening of the U.S. dollar.

Birks & Mayors reported that store traffic in both Canada and the U.S. reflected an unprecedented decline in discretionary consumer spending during the fiscal year. The company’s profit was 42.7 percent of net sales, down from 46.5 percent one year ago. The decline was primarily due to prices being lowered in the retailer’s stores across Canada during November 2007 as the U.S. dollar plummeted compared with the Canadian dollar. At the end of Birks & Mayors’ fiscal year, its inventory totaled $155.6 million, compared with $181.9 million one year earlier.

Hong Kong Jewelry Sales Fall
Hong Kong’s retail sales sagged 6.2 percent to $2.8 billion (HKD 21.6 billion) in May, with the jewelry sector ranking among the worst performers, according to a report from the country’s Census and Statistics Department. Total retail sales fell 6.4 percent by volume for the month, while jewelry, watch, clock and valuable gift sales declined 10.9 percent. A department spokesperson said that sales may have been dragged down by the decline in tourist traffic in May, adding that local consumer sentiment continued to hold up.

Japan Department Store Sales Plunge
Japan’s department stores sales dropped 11 percent from January to June, the sharpest decline for a half-year period since the Japan Department Stores Association began tracking sales statistics in 1965, according to Kyodo News. In the six-month period, sales totaled $35.3 billion (JPY 3.2 trillion). Sales of luxury goods, including art and jewelry, fell 19 percent.

In June, department store sales totaled approximately $5.8 billion (JPY 532 billion) at the 272 outlets of the 87 companies surveyed by the association, Kyodo reported. Same-store sales fell 8.8 percent from a year earlier, down for the 16th straight month. However, the rate of decline slowed to single digits for the first time in five months. — Additional reporting by Acquire Media.

Article from the Rapaport Magazine - August 2009. To subscribe click here.