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Cool weather warms retail sales in Sept.

The Baltimore Sun

CHICAGO -- Consumers shifted to higher-end stores in September, opening their wallets for fashionable clothing and accessories as a spell of chilly weather, a late start for back-to-school shopping and lower gas prices proved particularly helpful for upscale department stores and specialty retailers.

With few notable exceptions, retailers turned in better-than-expected same-store sales results as consumers shopped for fleece, sweaters and leggings, monthly sales reports showed yesterday.

Sales among higher-end retailers such as Nordstrom Inc. and Saks Inc. and mid-tier department stores such as Kohl's Corp. and J.C. Penney Co. Inc. stood out.

Federated Department Stores Inc., parent of Macy's and Bloomingdale's, saw same-store sales climb 6.2 percent as shoppers flocked to malls for the relaunch of the Macy's stores. The retailer rebranded 400 of the former May Co. stores to Macy's on Sept. 9.

Lackluster sales at Wal-Mart Stores Inc. and Fred's Inc. underscored the troubled economic reality for consumers living paycheck-to-paycheck.

Among retailers specializing in teen and children's apparel, Bebe Stores Inc., Children's Place Retail Stores Inc., and American Eagle Outfitters Inc. all saw surging sales as their customers sized up fashions at school before hitting the stores.

With 57 companies reporting, the International Council of Shopping Centers logged a 3.8 percent cumulative gain in same-store sales, a closely watched gauge of receipts at stores open at least one year.

The September results continued a "solid and steady pace," with the third straight month of nearly identical results, said Michael P. Niemira, chief economist for the New York council.

By a margin of roughly 3-to-1, more retailers outpaced forecasts than missed, according to analysts reporting to Thomson Financial.

"It's not the boon you might expect considering some of the numbers, but this isn't a bad performance and indicated that sales have been pretty consistent, though the composition has changed somewhat," Niemira said.

Department stores, for example, had a considerably stronger showing than discount and dollar stores. "A lot of things clicked for the month and it certainly helped that the type of goods they sell - apparel - were doing very well," Niemira said.

It was clear earlier this week that Wal-Mart Stores Inc. would be the aberration when it said Wednesday that its same-store receipts inched up 1.3 percent in September. The world's largest retailer confirmed that figure yesterday.

Thomas M. Schoewe, Wal-Mart's chief financial officer, noted that clothing sales were sluggish. "Our apparel sales did not meet our expectations for the month," he said.

At Wal-Mart's namesake units, September's comparable-store sales rose 1.3 percent, while Sam's Clubs was up only 1.1 percent. Total revenue rose 11.8 percent to $31.21 billion.

If Wal-Mart's results are subtracted, the retail numbers of the International Council of Shopping Centers surged 6 percent, from 3.8 percent, Niemira said.

To Stephen J. Hoch, marketing professor at Wharton School of Business, that underscores the state of spending for lower-income consumers.

He said there appears to be a slight shift up from the discount stores to those in the mid-priced range. Those consumers "are still feeling hurt in the pocketbook due to a year's worth of high gas prices and they're tapped out in terms of home equity."

Children's Place knocked out a 20 percent increase in same-store sales results, well above the 14.6 percent estimate to make it among the best-reported retailers at Thomson Financial.

Bebe Stores said same-store sales surged 15.3 percent compared with an expectation of a 10.7 percent increase, and Guess Inc. turned in an 11.3 percent rise that was far better than the 4.3 percent estimate.

American Eagle Outfitters blew away same-store sales expectations and raised its third-quarter profit projection range by a nickel a share. The casual-wear retailer that has been a favorite among teens in recent months said same-store sales surged 19 percent, well ahead of the 11.6 percent expectation.

Upscale retailer Nordstrom Inc. saw its same-store sales increase 13.4 percent, and J.C. Penney turned in an 8.7 percent gain in same-store sales.

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