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US apparel retailers' July 2016 sales roundup

July proved to be another challenging month for the few US apparel retailers who still report their monthly sales, with the majority reporting comparable declines. Unseasonable weather, clearance and promotional activity, and even the impact of Pokemon Go are all blamed.

According to first figures from research firm Retail Metrics, comparable store sales for the US retail sector as a whole were down 1.7%, marking a deterioration from June's 2% year-on-year increase. The outlook is rosier, however, for the second quarter, with estimates of a noticeably more positive growth forecast of 0.8% for the broader retail industry.

Ken Perkins, president at the research firm Retail Metrics, says the success of this year's Amazon Prime Day 2.0 in July, as well as a modest rise in auto sales during the month, show the consumer is spending. But many retailers are finding it hard to encourage consumers to spend in their stores and on their websites.

"July is typically characterised by significant clearance and promotional activity ahead of key back-to-school and early fall floor and web sets," Perkins notes. "Unseasonable weather in May left many retailers with excess summer merchandise heading into June and July. This translated into heightened promotional activity in July which was likely exacerbated by Amazon Prime Day 2.0.

"Wal-Mart and numerous department stores reacted to Amazon's big sale day with promotions and free shipping of their own. Additionally, the Pokemon Go craze throughout the month looks to have pushed millions off the couch and outdoors but may have been yet another activity that diverted consumer's attention and time away from shopping.

Winners and losers

All but one of the apparel retailers still reporting monthly comparable store sales posted declines in July, while the only company in positive territory reported a mid single-digit gain.

The Buckle fared the worst with a decline of 10.9%, marking its fifth straight double-digit decline and sixth in the last six months.

Cato Corporation said its July sales were well below expectations, falling 10%, while comparable sales at Zumiez dropped 2.9%, representing the retailer's best monthly same store sales performance in a year and the 16th consecutive monthly sales decline. Analysts put the decline down to lower comparable transactions, offset in part by higher dollars per transaction.

Meanwhile, L Brands saw the month's strongest performance, turning in a 2% comparable store sales rise for July, above analyst consensus and better than management's expectations.

July sales overview

Denim specialist The Buckle saw comparable store sales tumble 10.9% year-on-year in the four weeks to 30 July, its 13th consecutive monthly same store sales drop. The retailer, which operates 467 retail stores, saw net sales decline 9.8% to US$66.5m compared to net sales of $73.8m.

Value-priced fashion and accessories retailer The Cato Corporation saw its sales slip 8% to $61.2m in July, down from $66.9m last year. Same-store sales decreased 10% for the month. The retailer operates 1,373 stores under the Cato, Versona and It's Fashion formats.

At action sportswear and footwear retailer Zumiez, which operates 673 Zumiez and Blue Tomato formats, total net sales for June were up 1% to $61.9m from $61.4m the year before. The men's category posted positive same store sales while juniors, hardlines, and accessories were all negative.

For L Brands, owner of the Victoria's Secret, Pink and La Senza brands, net sales increased 2% to $777m for the four weeks to 30 July.

Gap is set to report its July sales on Monday (8 August).

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