Macy’s wins, Kohl’s loses in holiday sales
NEW YORK – The 2011 holiday shopping season will go down in the record books as the year the Grinch stole stores’ profits.
Many retailers sacrificed their bottom lines by pushing heavy discounts to shoppers bent on getting a good deal in a challenging economy. That created a sharp divide between stores that won the battle for wallets, and those that didn’t.
Retailers collectively reported a 3.5 percent increase in revenue at stores open at least a year for December, according to a tally of 25 merchants compiled by the International Council of Shopping Centers. For November and December combined, the figure rose 3.3 percent, a solid increase but still behind last year’s 3.8 percent pace.
Winners included Limited Brands Inc., Macy’s Inc., TJX Cos. and Nordstrom Inc., which posted strong revenue gains that beat analysts’ estimates. Macy’s, Ross and Limited even boosted their earnings outlooks.
On the losing side, Target Corp., Kohl’s Corp. and J.C. Penney Co. cut their fourth-quarter earnings projections after reporting weaker-than-expected sales. Gap had a big sales decline.
“There’s no question that the divide is getting wider, and will get even wider this year as the winners continue to take share away from rivals,” said Joel Bines, managing director in the retail practice of AlixPartners. “Consumers have limited time, money and attention, and they’re investing in a smaller subset of retailers.”
Costco Wholesale Corp. continued to resonate with recession-weary shoppers. Its revenue at stores open at least a year rose 7 percent in December.
But Target posted a 1.6 percent gain for December on weak sales of electronics, books and music.
Macy’s was the biggest winner among department stores, benefiting from its effort to tailor merchandise to local markets. The retailer has also beefed up training for its salespeople and focused on exclusive merchandise, such as a line of dress shirts and ties under Donald Trump’s name.
In contrast, J.C. Penney Co. and Kohl’s Corp. had a harder time. Kohl’s posted a 0.1 percent decline, while Penney had a slim 0.3 percent gain.
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