Last-Minute Buyers Boost Business But Retailers Still Under Pressure
Undated (AP) _ With the final Christmas shopping sprint in full swing, retailers are counting on last-minute buyers to boost business and bolster profits.
Several store executives contacted Thursday said they noticed a pickup in sales heading into a final weekend that could decide if this is a ho-hum or ho-ho-ho holiday season.
Analysts agreed that sales have improved but warned that some of the buying enthusiasm that usually shows up in the days just before Christmas may have been used in picking over the bargains that have been widely available throughout the peak shopping weeks since Thanksgiving.
″I think that we’re seeing a moderate increase in retail momentum in the last week,″ Morgan Stanley & Co. Inc. retail analyst Walter Loeb said. Sales of coats, sweaters and other warm clothing have been better than expected because of bitterly cold weather around the country, he said.
Loeb noted, however, that ″some of the excitement of the last-minute shopping was undermined.″
Bargain hunters have been enjoying a jolly time, finding plenty of prices marked down - particularly at department stores owned by cash-starved Campeau Corp. and their competitors.
In the dog-eat-dog New York market, Campeau-owned Bloomingdale’s as well as rivals Macy’s and Lord & Taylor have been advertising price cuts of 20 percent or more on dresses and other apparel. Bloomingdale’s, which is being sold by Campeau, is under extra pressure to pump up sales so that it will fetch the best possible bid.
The price competition isn’t as fierce in all metropolitan areas as it is in New York but analysts say that this year generally has been more promotional than normal.
Retailers offering enhanced services, such as personal shoppers and pre- wrapped presents, say the effort is paying off. Many retailers are pleased with their results so far.
John Buller, senior vice president of marketing at The Bon Marche, said the Seattle-based department store chain, owned by Campeau, is having one of its best years ever.
Sales at The Bon Marche’s 43 stores mostly in the Pacific Northwest have been running in the ″high single digits″ above last year, spurred by numerous merchandising ideas, Buller said. Every floor of each store has displays of gifts wrapped and ready to be put under Christmas trees.
Luxury gifts and accomodating service have pulled customers. Kenneth Watson, chairman and chief executive officer of Gump’s, said besides providing personal shoppers - staff who act as elves for customers - Gump’s is offering free delivery in the San Francisco Bay area and direct telephone lines to make it easier for shoppers to place orders.
Watson said holiday business at the upscale specialty chain is about 12 percent over a year ago. ″I would say in our case it’s much better than expected or anticipated.″
Crystal, watches, pens, travelers’ clocks and leather bags have been fast sellers at the tony Cartier jewelry stores, said Thierry Chaunu, vice president of marketing.
In addition to discounted apparel and accessories, moderately priced home furnishings appear to be selling well, store executives and analysts said.
Clark A. Johnson, chairman and chief executive officer of Pier I Imports Inc., a specialty furnishings chain of 511 stores, said Christmas sales are running about 20 percent above 1988. The strongest regions have been Florida, northern California and the Pacific Northwest with Texas and the Boston area the weakest.
Spending on consumer electronics seems to have held up despite overall sluggish sales of expensive durable merchandise, such as home appliances.
The 90-plus franchisees of Software City have reported ″pretty brisk″ business since Thanksgiving, president Shep Altshuler said.
Maria Cirino, marketing vice president for the New Jersey-based discounter, said sophisticated computer systems previously associated with businesses are being bought for home use.
Programs that help people organize budgets or tax information and educate children are hot sellers, she said. Broder Bund’s software including ″Where in the World is Carmen Sandiego″ or ″Where in Time is Carmen Sandiego,″ intended to teach geography and history, are two sought-after programs.
Many retailers were reluctant to assess their performance knowing that the next few days could be crucial. A late rally last year salvaged the holiday season, which typically accounts for half or more of a retailer’s annual profits.
″The question is: ’What happened this week?‴ said Rosalind Wells, chief economist of the National Retail Merchants Association.
Even if it meets retailers’ most optimistic dreams, there will be stores stuck with slow-moving merchandise that will have to slash prices to unload seasonal goods.
Said Loeb of Morgan Stanley: ″There will be heavy clearance markdowns. You’ve got to get rid of seasonal merchandise.″