In-Store Declines Drag Down Traditional Retailers
January 06 2017 - 3:05PM
Dow Jones News
By Suzanne Kapner
The shift to online shopping left chains with physical stores
behind this holiday season.
First Data Corp., which tracked the credit, debit and other card
transactions at one million merchants, estimates that online sales
increased nearly 11% during the holiday season, compared with just
2.7% growth at brick-and-mortar stores.
J.C. Penney Co. on Friday joined a host of retailers reporting a
disappointing end to the year. Sales at existing Penney stores for
the combined nine-week November and December period fell 0.8%. But
its online business grew by double digits.
As shoppers moved online, they increasingly went to Amazon.com
Inc. The web retailer dominated the holiday season, garnering 38%
of online revenue, according to Slice Intelligence, which analyzed
digital shopping receipts. The next closest competitor was Best Buy
Co., with a 4% share.
The divergence between declining foot traffic at physical stores
and gains online played out across the industry. Macy's Inc. and
Kohl's Corp. on Wednesday both reported weak holiday sales, and cut
their earnings forecasts for the current fiscal year. Barnes Noble
Inc., L Brands Inc. and Sears Holdings Inc. followed Thursday with
their own disappointments, sending a number of retail stocks down
during the day's trading.
G-III Apparel Group Ltd., which makes Ivanka Trump's clothes
among other brands, said same-store sales in its current quarter
will decline slightly for its Wilsons Leather and G.H. Bass chains
due to warmer weather, lower traffic and an "overall challenging
retail environment."
RetailNext, which analyzed 31 million shopping trips, estimates
that sales at brick-and-mortar chains fell 10% in November and
December, while traffic declined 12%. But the average transaction
value increased 5%, helping to offset some of those shortfalls.
According to First Data, electronics and appliances fared the
best with sales gains of 8.5% during the holiday season, while
clothing and accessories performed with worst, increasing sales
just 0.1%.
A few apparel chains, including Gap Inc. and PVH Corp., bucked
the downward trend.
Gap reported that sales at existing stores rose 2% in November
and December, boosted by a jump in its low-cost Old Navy division
and a return to same-store sales growth in its flagship chain for
the first month since April 2014.
PVH, which owns Tommy Hilfiger, Calvin Klein and Van Heusen
brands, raised its earnings guidance for the current period and the
fiscal year. The upbeat outlook came despite the company's
dependence on department stores, which have been shrinking.
Two of the country's biggest retailers, Wal-Mart Stores Inc. and
Target Corp., have yet to update investors on their holiday
results.
--Anne Steele contributed to this article.
Write to Suzanne Kapner at Suzanne.Kapner@wsj.com
(END) Dow Jones Newswires
January 06, 2017 14:50 ET (19:50 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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