Hot Denim Shores Up Back-To-School Sales

Nail-biting retailers can finally exhale. While the economic tea leaves don't look great for retailing overall, early reads on the critical back-to-school sales period - driven by denim-devouring teens -- are stronger than many expected.

Abercrombie & Fitch, for example, reports that its same-store sales, a measure closely watched by retailing experts, gained 6% in August, while American Eagle Outfitters Inc. says its same-store sales rose 9%. And at Pacific Sunwear, sales gained 9.6%.

Many of the hot items are wide-leg denims, pushing the skinny jean - at least for now - out of the picture, according to research from retail analysts at Brean Murray, Carret & Co. Among the best-performing brands, it says, are Guess, "which continues to roll in new denim offerings," and True Religion, "the fashion leader in the premium denim wide-leg category." Its new looks have sold out at Bloomingdale's and Nordstrom.

Luxury retailers continued to shine, with Saks' sales climbing 18%, Nordstrom up 6%, and Neiman Marcus up 5%.



But discounters reported stronger-than-expected results, too. At Target, sales advanced 6.1% and at Wal-Mart, which had predicted August sales gains of 1% to 2%, sales actually rose 3%. (A new report from TNS Retail Forward finds that a staggering 22% of U.S. primary household shoppers do most of their casual apparel spending at Wal-Mart.)

Macy's says sales rose 2.4%, but other mid-range retailers struggled, with J.C. Penney Co. reporting a 4% fall, and Kohl's sales dipping 0.6%.

Overall, August same-store sales growth improved to 3.2% from the prior month, according to TNS Retail Forward, but weakened from the prior year for 49 retailers reporting monthly results. (August's result is up from a 2.9% sales-weighted composite reported last month and down from the 3.9% composite reported in August 2006.)

Next story loading loading..