Breaking News

Trump challenges Biden to ‘no holds barred’ presidential debate
Business

Holiday retail sales were anything but jolly

By
Social Links for Catherine Curan
Published Jan. 17, 2015, 11:03 p.m. ET

Like the last of the dead Christmas trees finally being cleared off city sidewalks, retailers’ hopes for the holiday selling season are all dried up.

Last Wednesday, the Commerce Department reported a steep 0.9 percent drop in overall retail sales for December, with declines in almost every category. Without a compelling fashion trend to spark sales, revenues at clothing stores dropped 0.3 percent, while even the hottest gadgets of 2014 couldn’t prevent a 1.6 percent slide in electronics.

“Consumers are still cautious,” said Jim Rice, vice-president at Creditntell, adding that the season would have been worse if not for plunging gas prices freeing up cash for shopping.

Experts expect another tough year for retailers, with exceptions at the high and low ends of the spectrum.

Well-heeled New Yorkers and wealthy tourists have been spending big on Madison Avenue, said Howard Feller, a partner at retail and fashion investment bank MMG Advisors. Bargain-conscious fashionistas, meanwhile, are flocking to chains such as Old Navy and H&M.

At Kamakura Shirts on Madison Avenue, Christmas sales rose 5 percent to 10 percent, according to manager Teruaki Mitsuzumi. Fashion-conscious business execs craving an upscale made-in-Japan label are making the brand’s first store outside Japan a hit. The company is seeking another NYC location downtown.

Foot traffic was flat at women’s fashion boutique Milly during the holiday season in 2014 compared with the prior year. But the boutique at 900 Madison Ave. still managed to post a 27 percent holiday sales gain, thanks to higher average unit retail prices and more units sold per transaction, said CEO Andy Oshrin. Tourists snapped up party dresses and sweaters, Oshrin said.

The big question for all retailers is how badly deep Christmas discounts dented gross margins in 2014. That picture will start to emerge next month when earnings season begins.

Winners:

  • Old Navy: Women have long been the driving force for family clothing purchases, and Old Navy scored big among female shoppers in search of cut-rate winter fashions. November-December same-store sales rose 12 percent.
  • Macy’s: Santa came to Macy’s Herald Square, snapped a few photos with screaming children and loaded up his sled with enough presents to help lift same-store sales 2.7 percent. CEO Terry Lundgren said Macy’s Web site and app did well.

Losers:

  • Tiffany: Shoppers skipped the blue box this season, with sales sliding 1 percent on weakness in the Americas and Japan.
  • Toys R Us: Even an avalanche of “Frozen”-themed toys couldn’t rescue Toys R Us, where comp-store sales slid 2.7 percent and sales at US locations — a category that includes the 110,000- square-foot Times Square flagship — plunged 5 percent.
  • Gap: Comp-store sales slid 5 percent in December alone.