Check Out Line: Retail’s Monday morning quarterbacks

Mon, Dec 28, 2009

Check out the various descriptions of the 2009 holiday shopping season, which unofficially ended on Friday with Christmas. Analysts’ Monday morning reviews range from ”adequate” to “quite pleased”.

“All in all … Holiday 2009 was good enough, but has a long way to go with catching up to what the consumer really wants,” said NPD Group analyst Marshal Cohen. “And if the economy is truly to recover, not only does the housing and credit market need to recover, but the innovation market for retail products must recover as well.”

But some retailers did show improvements in product assortments, according to UBS analyst Roxanne Meyer.

Meyer said women’s clothing chains gave their best showing in years in terms of product and promotions, with Urban Outfitters, J Crew Group and Chico’s FAS Inc on top, given their strong product assortments and lean inventories which allowed them to avoid steep, profit-sapping discounts.

“Despite delayed purchasing and storms, the majority held the line on promotions,” Meyer said.

Independent retail analyst Jennifer Black said retailers had back-up plans and were prepared this year — in stark contrast to last year, when the financial crisis erupted in September and quickly slammed the brakes on consumer spending, leaving retailers with heaps of unsold merchandise.

“Companies we believe had a great holiday include Nordstrom, Limited Brands, Chico’, J. Crew, Lululemon and Urban Outfitters to name a few,” Black said.

Wall Street Strategies analyst Brian Sozzi said he was “quite pleased by what appears to be signs of a pulse by the U.S. consumer (and foreign consumer who took advantage of their strong currency this holiday season).” Sozzi said he visited several New York-area malls on Saturday — the day after Christmas when many people flock to stores to return unwanted gifts or redeem gift cards– and noted that long register lines were made up of people returning gifts and buying things.

He said there were instances of 70 percent off at some stores, but on average, markdowns at specialty stores was under 50 percent and for department stores about 50 percent, he said.

Still, Sozzi cautioned against reading too much into this preliminary data, since the holiday quarter for retailers ends January 31.

“Said another way, there remains five critical weeks that could make or break a retailer’s P&L statement.”

Also in the basket:

Retail holiday sales improve upon 2008 disaster

Amazon shares up after Kindle boosts e-book sales

Retailers shoot for top-line growth in 2010 (WWD – subscription required)

(Photo: Reuters)