This holiday season's retail winners and losers
Stores that cater to the wealthy fared the best.
Tiffany (TIF), Coach (COH) and Macy's (M) were among the winners this holiday season, according to Jason Asaeda, retail analyst at S&P Capital IQ. He rates Tiffany and Coach as "strong buys" and doesn't cover Macy's, but points out that wealthy consumers are attracted to the exclusive merchandise being sold by department stores.
Americans are spending on Nike (NKE) and Fossil (FOSL) watches, according to Asaeda, who also rates both shares as a "buy." His views are backed up by third party data. A forecast released earlier this year forecast that spending on luxury goods would top $25 billion in 2011. Holiday sales are expected to rise 3.8% to $469.1 billion, according to the National Retail Federation.
For mid-tier retailers such as Sears Holdings (SHLD) and J.C. Penney (JCP), the season was less merry. Sears recently warned of weak holiday sales and announced plans to shutter as many as 120 locations. J.C. Penney has also struggled. In November, same-store sales fell 2%, which was worse than analysts expected. Asaeda rates Sears and J.C. Penney as a "hold."
"It was a tough retail season" for these chains, Asaeda said in an interview. "People were shopping on very tight budgets."
The Gap (GPS) is also expecting a tough holiday season. Buyers have not been warming up the fashions being sold by the San Francisco chain. "The more fashion that you offer, the better it is for you," said Aseada, who rates The Gap as a "hold."
Amazon.com's (AMZN) Amazon Prime program, which offers free two-day shipping among other benefits for annual fee of $79, probably drove traffic to the largest e-commerce company. Bringing back layaway will help bolster Wal-Mart's (WMT) returns.
Best Buy (BBY) probably had the worst holiday season of any retailer. The company recently stunned investors by announcing that it wouldn't be able deliver some orders in time for the holidays. The Minnesota company will have difficulty recovering from such a major blunder.
Jonathan Berr does not own shares of any listed company.
Tiffany....hmmm. I found Tiffany crystal candle holders at Goodwill not too long ago, $3.50 for the set. :) Coach bags are a dime a dozen. Why be like everyone else?? My only advise is to not get caught up in keeping up with the Jones. Trust me...we live in a community where the the high school kids drive Lexus and BMWs. We have two teenage daughters and teach them to be frugal and smart with their money. Our money was spent at many retail stores this Christmas. I followed the sales and clearance items. Our new Christmas tree for next year was just purchased online for 50% off. We make plenty of money...but choose to hang on to most of it for rainy days and retirement.
Agree with Pricelister. Walmart and Best Buy - the shopping experience is CHAOTIC and usually not worth the time to buy the same item online at Amazon or another smaller retailer. Bought tons of stuff at Amazon with the free 2-day shipping (student) throughout Oct Nov and Dec. Several hundred dollars went to Amazon, JC Penney (again the one solo store NOT attached to the shopping mall), and Macy's....but all mostly online. I also start shopping wayyyy early.... like in July/Aug timeframe. I shop earlier so we can afford more...I don't wait until to December to buy gifts. I mean, it comes the same time every year. I buy here and there throughout the year on sale in this economy not wait last minute. Fossil and Nike are not "upscale" - i bought gym shoes for 40 bucks at Nike in Dec, and a watch for 60 at Fossil on black friday..... NOT high price in my opinion.
I guess of what is called "upscale" I wouldn't put Fossil watch as that, but Rolex obviously (with the cheapest watches around $8000). There was no doubt more spending this year esp. with electronics & clothes of what I seen. Aeropostale & Old Navy(Gap) being the two winners this season. HH Gregg what I seen were mostly sold out on the big screen TV's with all the latest techno features: 3D, internet capable, Smart TV etc. (a somewhat upscale buy, but prices are very competitive & low right now). People are looking for the bargains still this year, but it is interesting that the lower to mid level stores (except maybe the Five Below or Dollar Stores IMO) did take a hit like Sears, Kmart, JCPenny, Wal-Mart etc. People want quality for a good price, and that's what was hot this year - even for a little more outlay. To all have a Happy & Healthy New Year!
Me: Upper middle class family man in suburban Chicago. I observed many squarely middle class shoppers buying bargains at Macy's. The newer, non-mall JC Penney in my middle class neighborhood was rocking all month...many,many spanish-speaking customers...whatever that indicates. Sears - Don't go there unless I need tools. Best Buy - Chaotic environment, overpriced merchandise...I go in there once a year and remember why I spend ZERO there. The Nordstrom I visited was busy and I bought there...merchandise and service justify the price. WalMart - Pharmacy only. Bought a Fossil watch as a gift...under $100 is not what I'd call an upscale watch. Gap - Has "normal" clothes and good holiday sales...spent hundreds there for the wife and kids.
what if that lady already knew it was a wild goose chase, that your item didnt exist. what if she just wanted to get paid for sitting on the phone and interrupting other employees around the company. any wonder that company is down sales?
but then i guess you wouldnt think she was some kind of hero for acting like your personal assistant. wonder how many other customers will never shop at that store because the employee was tied up with you instead of helping them with a simple problem.
stores find that customer service is overrated. if its on the shelf, its for sale. if its not, deal with it. plenty of people that can manage to find what they need without intensive assistance, no need to throw all their resources at a couple people with super-high expectations. especially if they are not upscale and expensive in the first place.
some customers are just not worth dealing with. you sound like one of them.
As to some of the companies mentioned above, I feel Best Buy also blundered with its TV ad campaign. The negative qualities projected in their Greedy Woman shopping and harrassing Santa, cast an unpleasant impression of THEM. Add that to their cancelled and out of stock Xmas orders, they really were the epitamy of Corporate Greed themselves.
Macy's consistently keeps up appearances with pleasant service, solid products and prices that appeal to most all classes. JCP and SEARS still seem to have never crawled out of their 1960s/1970s middle class family BLAHS. No matter what they try, they never seem to pull off looking Modern. I want them to survive, but unless they get better AD Companies, they are just going to continue to fade away.
NIKE, to me, is just over-priced trash that rides on celebrity names and cheap labor. The rioting over the new Jordan's is another example to me of their failure and it is sad that folks still give them credence at all.
Amazon still continues to maintain HOW to do it right! Walmart always seems to have that one thing you cannot find anywhere else, LOL. The GAP is like JCP and Sears and is falling into a rut. Their shops are great big empties and boring - 1984 was fiction, not a clothing store!
I ramble on with my opinions and observations. However, those stores that are failing need to take a clue from those that succeed - Good ADS, consistent service, listening to their consumers and finally, adapt or die. Darwin was right.
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Why are stronger numbers considered bad news? Investors are worried about the impact on inflation and interest rates.
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