Jump to content

NEWS WIRE: Electronics win in Black Friday sales


Recommended Posts

Posted

CHICAGO (Reuters) - Electronics retailers and Wal-Mart Stores Inc. were the early winners while some apparel chains faltered as the U.S. holiday shopping season started with a mixed Thanksgiving weekend, analysts said on Monday.

 

Consumers once again proved to be resilient in the face of steep energy prices and rising interest rates, although aggressive holiday discounts were the biggest draw, suggesting that household budgets remain tight.

 

Overall sales were either spectacular or flat depending on the survey, but analysts said Wal-Mart's aggressive advertising and discounts clearly paid off with better-than-expected day-after-Thanksgiving results.

 

Research firm ShopperTrak estimated that sales dipped 0.5 percent to $13.4 billion on Friday and Saturday. But the National Retail Federation (NRF) trade group said sales for the weekend jumped 22 percent to $27.8 billion.

 

ShopperTrak uses its own proprietary in-store monitoring devices as well as information from retailers to determine how much people spent in stores. The NRF surveyed about 4,200 consumers regarding their in-store and online purchases to come up with its figure, which may help explain the discrepancy.

 

Analysts listed video games, high-definition televisions and digital cameras among the weekend's hottest sellers, which bodes well for Best Buy Co. Inc. and others.

 

Apparel demand appeared to be mixed, however, with teen-oriented retailer Aeropostale Inc. (NYSE:ARO - news) getting a lot of attention for offering 50 percent off everything in the store while others, including Gap Inc., struggled to find the right fashions.

 

Investors dumped apparel and department store stocks, pushing the Standard & Poor's retail index down about 1 percent in early trading.

 

WAL-MART WINS, WHO LOSES?

 

"Estimates of the strength of this holiday season's kick-off ranged from cool to incredibly strong," CIBC World Markets analyst Peter Benedict wrote in a note to clients. "One thing for sure -- Wal-Mart started strong with both its Wal-Mart division and Sam's division exceeding plan."

 

Wal-Mart, the world's biggest retailer, said sales were better than it had expected on the Friday after Thanksgiving -- known as "Black Friday" because it traditionally marks the point when retailers turn a profit for the year.

 

It was not clear whether Wal-Mart's strength came at the expense of rivals, and the conflicting surveys on holiday weekend sales only clouded the picture.

 

Target Corp., the No. 2 U.S. discounter, warned earlier this month that November sales would miss its forecast, which analysts blamed at least in part on Wal-Mart's aggressive holiday campaign.

 

No. 3 discount chain Kmart, which acquired Sears, Roebuck & Co. earlier this year to form Sears Holdings Corp. said electronics, jewelry and toys were among its best sellers over the holiday weekend. Sears does not release monthly sales, but is expected to report third-quarter results next week.

 

"We're definitely pleased with the weekend's results," Kmart spokeswoman Colleen Cleary said.

 

Despite the mixed reports, analysts agreed that discounts were key to getting shoppers into stores. Goldman Sachs research showed that some 78 percent of retailers had increased their promotions from last year.

 

Electronics were among the big sellers with standouts including the

Xbox 360 video game console, LCD televisions and digital cameras.

 

Credit Suisse First Boston analyst Gary Balter advised clients to buy shares of Best Buy and Circuit City Stores Inc. on any weakness in the next couple of weeks, saying the current quarter was shaping up to be a strong one.

 

Apparel demand was mixed as chains including Gap have acknowledged that their merchandise was unpopular. Analysts said current fashion offerings seemed uninspiring compared with last year, when pink was hot.

 

Still, Merrill Lynch analyst Mark Friedman said clothing retailers seemed to be sticking to their markdown plans so far, and there was no evidence of last-minute panic discounts.

 

"Aeropostale's 50 percent off the entire store seemed to be the most effective" promotion, he said in a research note.

Posted
Very interesting. I can appreciate the part about the GAP. I truly had to wonder what they were thinking. It didn't seem as if they got on board w/ any sales. I know we also went into Pac Sun- and they NO sale on BF. I was shocked.
×
×
  • Create New...