Chilly January, Gift Cards Boost Retail Sales

Led by double-digit gains at stores like Saks and American Eagle, January same-store sales growth numbers came in better than most observers expected yesterday.

"The underlying numbers suggest a strong start to the year," reported Retail Forward, a Columbus, Ohio-based consulting company. Due mainly to those ubiquitous Christmas gift cards and some mighty chilly weather, its index of 60 leading retailers showed an increase of 4% in same-store sales--up from a 3.2% sales-weighted composite reported last month. (January's numbers, however, were below last year's strong gains of 5.1%.)

Standouts included teen retailer American Eagle, up 17%; Saks, 11.4%, and Neiman Marcus, 11.3%.

Even at Gap, hammered by bad sales results in recent months, results came in better than expected, thanks to brisk sales at its Banana Republic division. January sales were flat overall, while most analysts had been looking for decreases of more than 7%.

Ann Taylor was one of the biggest losers, with sales falling 10.2% in January.

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Department stores were big gainers overall, with Kohl's up 8.7%, J.C. Penney, 3.6%, and Federated Department Stores 8.6%. (Earlier, the company had told Wall Street analysts to look for gains in the 1.5% to 3% range.)

A spokesman for Federated Department Stores said yesterday that published reports about its plans to build smaller Macy's stores in fast-growing suburbs didn't reflect a change in corporate strategy. Comments made by a Federated executive in the Chicago Sun-Times referred to a specific strategy in the Macy's North division, he said, particularly the addition of a new store scheduled to open this spring in Bolingbrook, Ill. "Our focus continues to be on increasing same-store sales growth," the spokesman said.

And finally, call it the revenge of the flat-screen TV: Circuit City said yesterday that to shore up results following heavy TV discounting, it would close seven of its U.S. stores, and 62 stores internationally.

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