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Weather Warms Up Consumers' Buying Mood

Popular fashion styles and a stronger economy get credit for the biggest monthly sales gain in nearly four years.

March 05, 2004|Leslie Earnest | Times Staff Writer

U.S. retailers posted their strongest monthly sales gain in nearly four years during February as warmer weather, tempting spring fashions and a strengthening economy energized shoppers. A number of California companies, including Guess Inc. and Gap Inc., logged double-digit advances.

Overall, comparable-store sales rose 6.7% last month, according to the International Council of Shopping Centers, which compiled the year-over-year results from 71 retail chains. It was the biggest one-month increase since April 2000 and the strongest February gain in five years.

The report cautioned against assuming that last month's strong results reflected a comparable jump in consumer demand. Sales rose a mere 0.9% in February 2003, making comparisons easy. A year ago, shoppers were put off by winter snowstorms and uncertainty over the pending war with Iraq.

In addition, February had an extra shopping day this year because of leap year.

"The economy is still improving, and consumers are gaining a little more confidence," said Patrice Duker, a spokeswoman for the shopping center group.

Higher tax refunds and warmer temperatures also helped get shoppers into stores.

Wholesale clubs collectively logged the heartiest increases with a 9.3% gain, but apparel chains also showed surprising strength, rising 8.6%.

"It's just showing that, once they get [the fashion] right, people come back" to buy clothes, Duker said.

High-end department stores, such as Dallas-based Neiman Marcus Group Inc. and Saks Inc. in Birmingham, Ala., also posted strong results as emboldened shoppers continued to gravitate to more-expensive merchandise.

Neiman Marcus swelled 24.4%, and Saks boasted a 14.7% increase.

In further evidence of Gap's turnaround, the nation's largest specialty apparel retailer's sales jumped 12%, with its highest-priced chain, Banana Republic, advancing 30%. Gap U.S. rose 6% and Old Navy, the family-oriented division, increased 16%.

"It really seems like Paul Pressler's team is doing all the right things," said Joseph Beaulieu, an analyst with Morningstar, who credited the chief executive and his managers at the San Francisco company with ratcheting up its market research to figure out how to more effectively lure customers.

Gap's stock closed at $21.52 on Thursday, up 45 cents, on the New York Stock Exchange.

But Beaulieu said it still wasn't clear whether Gap could regain its standing as a fashion leader.

"The jury's still out," he said. "There haven't been any big fashion flashes under Pressler, but there haven't been any big flops either."

Fashion hits have helped propel sales for Guess Inc. lately, as the Los Angeles retailer's same-store sales jumped 14.8% in February, President Carlos Alberini said. Women have been snapping up accessories and stretch sateen pants, and men favored fashion denim and woven shirts, he said.

"I think we're hitting the trends right," Alberini said, adding that Guess has logged 11 consecutive months of positive same-store sales, with recent sales strongest along the West Coast.

Investors have driven Guess' stock price up 386% over the last year. The shares hit a 52-week high Thursday before closing at $17, up $1, on the NYSE. Not all retail stocks fared as well Thursday, with a key index of 30 retailers slipping 0.03%.

Other California retailers posting showy results last month included Brisbane-based Bebe Stores Inc., which jumped 24.2%, and high-end-gadget seller Sharper Image Corp. in San Francisco, which rose 20%.

Gymboree Corp. posted a 7% increase in same-store sales in its retail operations in February. The Burlingame, Calif., company, which in September 2002 launched a higher-end children's chain called Janie & Jack, said this week it would begin testing an apparel chain, Janeville, targeting women 35 and older.

"We're really going after ... Janie and Jack's mom," CEO Lisa Harper said.

Not all California retailers, however, have had much to boast about lately.

Wet Seal Inc., parent of Wet Seal, Arden B and Zutopia apparel stores for girls and young women, said comparable-store sales for continuing operations fell 12.5% last month, after sinking 31.5% in February 2003.

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