Save E-mail

Send this URL to a friend:

* - Denotes a required field.
Your Name*
Your Email Address*
Friend's Name*
Friend's Email Address*
Subject*
Message*

Print

New York--Financials released by some of the country’s largest department store chains show that retailers that cater to the shrinking middle class continue to struggle while those that target wealthier consumers are posting sales gains.

This week, both Sears Holdings Corp. and J.C. Penney Co. Inc. reported a decline in same-store sales for the third quarter, while comps climbed for high-end retailer Saks Fifth Avenue, which reported it was able to move more full-price merchandise.

Below are highlights from each chain’s third-quarter financials.

Sears Holdings Corp.
U.S. comps fell 1 percent in the third quarter for Sears, with declines of 1 percent at both Kmart and Sears stores. Total sales declined from $9.7 billion to $9.6 billion, and the company’s net loss increased from $218 million to $421 million year-over-year.

Sears Holdings CEO Leo D’Ambrosio said while the company is “not satisfied” with its quarterly results, online sales grew about 20 percent in the quarter. The company said it will focus on providing customer service using a combination of online, mobile and store-based services and, as previously announced, will be rolling out iPads and free WiFi in stores.

“We believe it is becoming more and more obvious that the future of retail will revolve around the seamless integration of online and offline experiences. Sears Holdings has the combination of assets that will allow us to play a large and important role in bringing these experiences to all Americans through integrated retail,” D’Ambrosio said. 

Sears ranks No. 7 on National Jeweler’s 2011 list of $100 Million Supersellers.

J.C. Penney Co. Inc.
Same-store sales declined 2 percent in the third quarter for J.C. Penney, while total sales were $3.99 billion, a 5 percent decline that reflects the company’s exit from its outlet and catalog business.

The strongest merchandise sales came in women’s accessories and men’s apparel, while the Southeast was the strong-performing region.

The company’s net loss widened, from a profit of $44 million in the third quarter 2010 to a loss of $143 million in the third quarter 2011.

Online sales through JCP.com fell 5 percent to $341 million. Margins declined from 39 percent to 37 percent, as the company had to pump up promotions because of weak sales.

“While our more affluent customers continued to respond well to J.C. Penney’s attractions, the moderate customer continues to have limited discretionary spending capability, and that was apparent during the quarter,” Executive Chairman Myron Ullman III said.

The company projects its fourth-quarter comps will be flat or up slightly.

J.C. Penney ranks No. 8 on National Jeweler’s 2011 list of $100 Million Supersellers.

Saks Inc.
Saks Inc. reported that its same-store sales increased 6 percent in the third quarter, though its Off 5th discount store segment did not perform as well as Saks Fifth Avenue stores.

Total sales were up 5 percent, from $658.8 million to $692.3 million. Jewelry, along with women’s contemporary apparel, women’s shoes, handbags and men’s apparel, shoes and accessories, were the company’s strongest-performing categories.

Net income was up from $36.3 million to $17.8 million.

Online sales increased 24 percent, and margins increased from 43 percent to 44 percent, the result of increased full-priced selling and reduced promotional activity.

The company projects comps to grow in the mid- to high-single digit range in the fiscal fourth quarter.

“We continue to be optimistic about the future of luxury retailing in general and for Saks Fifth Avenue in particular, and we believe Saks is well-positioned for additional operating margin improvement over time,” said Saks Chairman and CEO Stephen Sadove. “In light of the geopolitical and macroeconomic environment we will continue to approach the future both cautiously and strategically.”

Saks Fifth Avenue ranks No. 25 on National Jeweler’s 2011 list of $100 Million Supersellers.