Reitmans slump harbinger of tough sales season January 8, 2009
Posted by businessnewss in Uncategorized.Tags: harbinger, Reitmans, Sales, season, slump, Tough
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Reitmans (Canada) Ltd. saw its same-store sales shrink in December, a sign that the 2008 Christmas selling season might not have been a very happy one for retailers.
Reitmans said Wednesday sales at its existing stores fell by 4.5 per cent for the five weeks ended Jan. 3. Overall sales for the same period, which included new outlet openings, dropped by 2.7 per cent.
But, the company’s president said what was happening to his clothing chain was probably mirrored by other firms throughout Canada’s retailing world.
“My guess is that (our sales drop) certainly is not out of line, if it’s not better than most,” said Jeremy Reitman.
Reitmans sells mainly women’s garments in 984 stores, under such well-known banners as Smart Set and Penningtons, including in 380 Reitmans stores.
For the first 48 weeks of 2008, sales at Reitmans squeezed past the $1 billion mark by $1 million, down $2.6 million for the same period one year earlier.
Canada’s retail sputter
Some analysts believe that, despite the troubles experienced by Reitmans, Canada might be able to avoid the retail catastrophe that is looming in the United States, where negative retail sales growth could translate into very difficult Yuletide results.
Wendy Evans, head of retail consultancy firm Evans and Co. Consultants Inc., said Wednesday she expects retail sales for the fourth quarter of 2008 to be up by one to three per cent compared to the same quarter of 2007.
In addition, the latest figures released by Statistics Canada showed the country’s clothing stores pushing their sales northwards by 0.7 per cent when October 2008 was measured against the same month one year earlier.
These same retailers, however, took an economic gut shot in October when those sales were compared to September, off 1.5 per cent.
By contrast, American garment floggers saw sales rise by 0.8 per cent measuring November’s preliminary estimate of retail sales against the final October figures.
Compared to November 2007, however, U.S. clothiers sold 5.3 per cent fewer wares in November 2008.
Reading the retail tea leaves
So far, forecasters are indicating that the Canadian retail market might enjoy positive growth in the final ? and crucial ? three months of 2008.
BMO Capital Markets, for instance, predicted that Canada’s consumer spending ? similar but not identical to retail spending ? will increase by 0.4 per cent in the fourth quarter of 2008 and 1.1 per cent for all of 2009.
On the other hand, the Canadian Restaurant and Foodservices Association forecast that spending in restaurants will slip nationally by 1.4 per cent in 2009.
“With Canada?s economy caught in the grips of a global recession, stagnant income growth and rising unemployment will lead consumers to cut back on discretionary spending,” the CRFA said in December when it released its industry forecast.
with files from The Canadian Press
