Shoppers spent more time – and money – in malls last month, with many retailers posting on Thursday strong results in what tends to be the final month of their fiscal year. The rich are doing a better job of prying open their wallets, as RetailMetrics, a research firm that covers the industry, reported that luxury retailers such as Saks (SKS) enjoyed larger gains in January than bargain stores. Signs of life in financial markets have made wealthier consumers more willing to spend ... and we all know that a recovery has to start someplace.The International Council of Shopping Centers estimates that January sales edged 3% higher year over year, following a 3.6% increase in December. The ICSC forecast for January was only 1%. A year ago, January sales were off 4.6% from the year before. These results are based on stores open at least a year and exclude Wal-Mart (WMT).
"Retailers are breathing another sigh of relief," said Ken Perkins, president of RetailMetrics. "There are more winners than losers," he added. Perkins also cautions against overstating the recovery, as there is still some way to go before consumer spending is pushing the economy into a recovery. Most retailers, according to Perkins, "are still very focused on value and stretching every dollar," a fact he says won't change for most of the year.
Macy's (M) is optimistic for fourth quarter profits and is raising its outlook. Gap (GPS), Abercrombie & Fitch (ANF) and Limited Brands (LTD) reported sales increases last month. Apparel stores in malls saw sales increase 6.4%, the sector's best performance since March 2007, when it saw sales gain 7%, according to the ICSC. In January 2009, this sector's sales were down 14%.
Discounters, however, didn't fare as well, with J.C. Penney (JCP), Target (TGT) and Costco (COST) only showing modest gains.
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