Retailers disappointed by April sales

THE BALTIMORE SUN

Many major retailers reported disappointing sales results last month as a hoped-for recovery from a lackluster March failed to occur.

Women's apparel continued a weak streak that has lasted for several years. But even recently strong categories such as electronics and home-improvement goods stumbled.

"Sales stink," said Robert F. Buchanan, a retail analyst with NatWest Securities Corp. in New York. "Right now shoppers are treating apparel stores like baseball fans are treating baseball teams: not showing a lot of respect and certainly not breaking out the old wallet or purse."

Maryland results matched the nation's. Landover-based Hechinger Co. said its same-store sales for April dropped by 10 percent, and it disclosed that profits for the first quarter will fall below analysts' estimates.

"The issue is the consumer," said Kimberly Howard, who follows Hechinger for Dillon Read & Co. in New York. "I don't think it's an indication of Hechinger's competitive strength. The consumer still hasn't come back."

Jos. A. Bank Clothiers Inc., based in Hampstead, said its same-store sales fell by 7.5 percent for the three months that ended April 29.

February and March were particularly disappointing for the suit and sport coat company, but April sales perked up, said Matthew Kahn, the company's executive vice president and chief financial officer. "May has actually been a little bit better than April" so far, he said.

Same-store sales, or revenue in stores open for at least a year, are considered a key measure of retail health because they discount results generated by new locations.

Shares of both companies fell yesterday. Hechinger "A" shares closed down 75 cents at $8.50 and Bank shares slid 25 cents to $2.75.

Baltimore-area stores don't seem to be selling much more merchandise than they did a year ago. The value of checks taken in by a wide cross-section of area stores served by TeleCheck Services Inc. rose by only 1.5 percent for April, compared with results at the same stores a year ago.

Rising interest rates were a factor. "People are concerned about their variable-rate mortgages," said TeleCheck spokesman Ken Wait.

But results haven't been equal for all area merchants. At White Marsh Mall, for example, jewelry stores have demonstrated strong gains since the beginning of the year while "men's and women's apparel is showing some soft spots," said marketing manager Karen Pospisil.

Nationally, major discount chains had the best overall sales results last month. April same-store sales rose by 11 percent at Wal-Mart Stores Inc., by 9.8 percent at Kmart Corp. and by 12 percent at Woolworth Corp. Those results were padded, however, by the fact that much Easter-related buying shifted to April this year from March last year.

Same-store sales for April rose by 1.4 percent for Sears, Roebuck & Co.; 5.9 percent for May Department Stores Co., parent of Hecht's; 3 percent for Gap Inc.; and 2 percent for Limited Inc. Same-store sales at AnneTaylor Stores Inc. fell by 6.7 percent.

Gap went so far as to say that not only were its sales disappointing; its profits were lower, too.

"Easter was not spectacular and it was very promotional," said Howard Davidowitz, chairman of Davidowitz & Associates Inc., a New York retail consultancy. "Most of my clients did not meet their sales plan, so they had too many markdowns."

Best Buy Co. Inc., the Minneapolis-based electronics retailer, had become accustomed last year to same-store sales increases of double-digit percentages month after month. Its results for April went up by only 3 percent.

Circuit City Stores Inc., another electronics chain, recorded a same-store sales increase of 12 percent for April.

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