Top 5 and Bottom 5 Retailers in August

9/7/2010
Financial analysts call it retail day, the day each month when roughly 30 publicly held retailers report the previous month’s comp store sales. Reports for August were strong, but there were clear winners and losers, including Abercrombie, Aeropostale, Nordstrom, Costco and Stein Mart. Find out which ones made the top five or bottom five list and why.
 
Everyone understands the economy is stagnant and sales growth is tough. But the struggle is about to get tougher as August marks the last month retailers benefit by going up against soft year-over-year comparisons. Starting in September retailers will begin comparing against stronger figures during months when the 2009 recession was loosening its hold.
 
So, summer is coming to an end on several levels for retailers. How did they perform and position themselves heading into the final quarter of 2010?
 
"August sales held up relatively well because shoppers' intention to curb their spending plans was outweighed by their back-to-school needs, especially when they scrimped on meeting those needs a year ago," says Frank Badillo, senior economist, for Kantar Retail.
 
Now for the top five and bottom five list.
 
Top 5 Retailers
 
Based on store sales for the month of August compared against sales for the same month a year ago the top five reporting retailers are:
 
Limited Brands                     +10%
Zumiez                                   +9.1%
Stein Mart                              +8.5%
Costco                                    +7
Nordstrom                              +6.3%
 
Success at the Limited Brands was due in large part to strong sales at Victoria’s Secret Stores, which “cranked out a strong +15% comp against a -5% comp in August last year,” says Richard Hastings, macro and consumer strategist at Global Hunter Securities. “The division’s August comp was ahead of its fiscal year-to-date trend of +13%, a favorable indication of sales momentum.”
 
Breaking out Nordstrom’s numbers finds that its full line stores were strong at +7.8% as were direct/online sales at+3.7%, while sales at Nordstrom Rack were weak at -4.2%.
 
Stein Mart, according to J. Philip Leichliter, president of J. Philip Group, attributes the chain’s positive performance to “a clearance event” that accelerated in the last weekend of the month. Also sales of new product in a “reinvented home area were strong” and “ladies career and accessories business exceeded company trend.” Geographically, however, sales “continued to be weakest in California and the Gulf states.”
 
Bottom 5 Retailers
 
As mentioned, overall sales were fairly strong in August, so the bottom five retailers didn't go as deeply into red numbers as we can expect to see in September when retailers start comparing to strong year-over-year months. Here are the bottom five retailers:
 
Bon Ton                                 -4.6%
Hot Topic                               -3.7%
The Buckle                            -3.5%
Destination Maternity          -3.2%
Aeropostale                           -1% (tied)
Rite Aid                                  -1% (tied)
 
Of the retailers in the red, three have been struggling for some time – Bon Ton, Hot Topic and Rite Aid. Each of these has unique marketplace forces to overcome in addition to the stagnant economy.
 
Aeropostale and The Buckle, however, do not have the benefit of being compared against weak numbers from a year ago. Instead these retailers were red hot last year and may have trouble maintaining such a torrid pace going forward.
  
Overall, August was a good way for retailers to end the summer. “The sales-weighted composite for the 30 retailers reporting — most of them apparel retailers — was better than the 2.9% same-store sales gain last month,” says Frank Badillo of Kantar Retail. “The gain was also up from a 2.4% decline in August of 2009.”
 
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