• by Sarah Mahoney  @mahoney_sarah, August 10, 2007

Since the critical back-to-school shopping period starts in July, many apparel retailers had been predicting that they'd have good news to report when the month's sales results came in. No such luck.

In fact, teen retailers showed some of the biggest declines in same-store sales, a measure that retail insiders watch closely as a measure of how much people are really buying. Sales fell 4% at Abercrombie & Fitch, 6% at American Eagle Outfitters, 7.2% at Wet Seal, 7.4% at Hot Topic, and 11.9% at Aeropostale.

At Gap Inc., while Banana Republic sales gained 1%, sales at Gap North America stores fell 2%, and at Old Navy, another back-to-school stalwart, sales took an 18% swan dive. "Product that was pulled forward into July did not resonate as customers remained focused on 'wear now' apparel," the company says. At Limited Brands, which owns both Victoria's Secret and Bath & Body Works, sales fell 3%. And at Kohl's, comparable-store sales came in flat.

Department stores showed more zip. While Macy's says sales fell 1.4% (in line with expectations), J.C. Penney is reporting an 11% gain, due primarily to a calendar shift. And as expected, high-end department stores cleaned up: Same-store sales advanced 5.7% at Neiman Marcus, 9.2% at Nordstrom, and 14.9% at Saks.

Overall, July same-store sales gained 2.9%, reports TNS Retail Forward, which tracks more than 50 major retailers in its index. July's result is up from a 2.3% composite reported last month and down from the 4.0% composite reported in July 2006, the consultant says.

"Shoppers might feel some relief from high gasoline prices, but it's unlikely to generate much of a bounce in back-to-school spending and beyond," it predicts. "The looming credit crunch is among the forces likely to dampen spending going forward."

And the consultants' polling regarding back-to-school spending is likely to give retailing execs August agita. Most shoppers (53%) say they are planning to spend about the same amount as last year, not more. And recently, the National Retail Federation predicted that spending on back-to-school clothes this year would come in flat, at $228.14 per household, or $7.6 billion.