Black Friday's winners and losers

Best Buy, Apple and Wal-Mart stores attracted massive crowds on Friday with discounts on consumer electronics.

By TheStreet Staff Dec 1, 2009 1:21PM

TheStreet.comSale © Image Source/CorbisBy Jeanine Poggi,


While Black Friday shouldn't serve as the sole gauge of holiday spending, it has revealed some possible winners and losers for the season.


Electronics were the most popular purchases last weekend, specifically flat-panel televisions.


"Despite the media hype surrounding Black Friday, the weekend is critical to the holiday season only for one major merchandise category -- consumer electronics -- which will see some 20% of Christmas sales over the three-day weekend," Craig Johnson, president at Customer Growth Partners, said in a statement.


Bing: More on Black Friday


Deep discounts lured shoppers to Wal-Mart (WMT), but Best Buy (BBY) was also among the standouts.


In its first Black Friday without direct competition from Circuit City, Best Buy attracted 25% of shoppers who bought TVs that day, according to UBS. Half of shoppers bought their TVs at Wal-Mart.


"If you consider how many more stores Wal-Mart has compared with Best Buy, this is a good showing," UBS analysts said during a conference call.


Best Buy also reigned supreme in the home appliances category, a sector starting to show signs of recovery, Johnson wrote.


While Sears (SHLD) gained attention for sales of washer-dryer sets, Best Buy said its stores sold all 80 of the washer-dryers allotted for discounts by mid-afternoon on Black Friday, Johnson wrote.


JPMorgan Chase analyst Christopher Horvers expects the electronics retailers to post a 5% jump in domestic same-store sales in the fourth quarter.


While Apple's (AAPL) iPod is losing its hottest gift ranking, the electronic company saw success with its new iMacs and MacBooks, which Kaufman Brothers analyst Shaw Wu said were out of stock or limited at many stores.


Apple stores continued to be the go-to shopping destination over the weekend, he wrote in a note.


Several reports rank department stores and discounters neck-and-neck as the primary shopping destination Black Friday weekend. The National Retail Federation said nearly half of shoppers visited at least one department store, while 43% shopped at a discounter.


"Department stores have done an admirable job touting both low prices and good quality, which are important requirements for holiday shoppers on a budget," NRF CEO Tracy Mullen said in a statement.


UBS analysts said J.C. Penney (JCP) and Macy's (M) appeared to have the highest conversion rate in the sector.


Still, it looks like no matter how you twist it, Wal-Mart remains king, with 65% of those surveyed by America's Research Group, in conjunction with UBS, saying they shopped at the discount behemoth.


This year, nearly all Wal-Mart stores were open on Thanksgiving Day (an attempt to avoid the deadly Black Friday stampede seen last year) and on Black Friday parking lots were jammed, with lines stretching around the store, UBS analysts observed.


Shopping carts were filled with a broad mix of products, with HP computers and pajama sets popular items.


Target (TGT) has been giving Wal-Mart a run for its money, as it boosts its value message this year. The discounter was significantly busier this year than in 2008, and stores opened at 5 a.m. rather than 6 a.m.


Compared to Wal-Mart, Target sold more small-ticket items and saw the most traffic in its consumer electronics and toy department.


Two teen retailers -- American Eagle Outfitters (AEO) and Abercrombie & Fitch (ANF) -- were upgraded on Monday for their strong showing over the weekend.


American Eagle was lifted to buy from hold by Lazard Capital Markets. Sales have risen in the first three weeks of November, and analyst Todd Slater said there is a chance the teen retailer will post better-than-expected fourth-quarter results due to a successful Black Friday and strong November sales.


Friedman, Billings, Ramsey analyst Adrienne Tennant upgraded Abercrombie to outperform from market perform as traffic improves at its Hollister chain.


Over the weekend, Hollister offered deep promotions on tops (buy one get one 50% off), denim (40% off), T-shirts and hoodies.


Tennant also booster her price target to $46 from $39.


Despite refraining from Black Friday promotions, Urban Outfitter's Anthropologie and J.Crew were still bustling with shoppers. "To me, this is a better indicator of long-term sustainability than seen from discounts," UBS analyst Roxanne Meyer said during a conference call.


Gap's Old Navy chain and Aeropostale were also some of the more crowded stores in the mall.


While apparel is slowly making a comeback, missy stores lagged the sector, as department stores offered more compelling promotions. Chico's ran a 20% discount, while Coldwater Creek was offering a 25% off sale.


Within women's apparel AnnTaylor Stores showed the most promise, as it stole market share with its 40% off early bird special, Meyer said.


As expected, sales at luxury retailers were slow. Generally luxury sales are concentrated in the last 10 days before Christmas, particularly for jewelry and watches. Coach's factory store, however, was the exception.


According to UBS, 300 people were in-line at a factory store they visited, and lines lasted several hours with shoppers purchasing multiple items.


Video games were also one of the biggest disappointments, Horvers wrote in a note.


GameStop received a boost from the launch of "Call of Duty: Modern Warfare 2" earlier in the month, but this hype is fading, and consumers are turning to discounters for video game value bundles.


"If you are a video game publisher and do not have a top-tier title in the market, it's going to be a challenging holiday quarter," Brian Sozzi, analyst at Wall Street Strategies, wrote in a note. He said he is starting to see discounts pop up across the board on video games, as well as some stronger promotions on some of the leading "triple A" titles.


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