Retailers Post Modest October Sales Rise, Portending Lackluster Christmas Season
The nation's big retailers posted modest October sales gains from year-earlier levels that were depressed by the stock market crash and consumer rejection of miniskirts and other women's fashions.</br></br>Last month's sales gains, which are a bit ahead of September figures, could spell a lackluster Christmas season. "Compared with last year, retailers are back on stable ground -- but don't expect a growth trend," said Kathy Ellis, a retail analyst at Morgan Stanley & Co. "This level will hold through the fourth quarter" when stores reap about half their full-year sales and earnings.</br></br>Jeffrey Feiner, an analyst at Merrill Lynch & Co., said the sluggish gains, "coupled with strong control over inventory levels and expenses, should enable most retailers to post 10% to 15% profit gains in the third quarter and 15% gains in the fourth quarter." He added that women's apparel, while not rebounding, "is showing gradual modest improvement as retailers seem to be responding to consumers' wants instead of dictating fashion."</br></br>Department stores and specialty retailers are benefiting from a modest turnaround in women's apparel, PaineWebber Inc.'s Margo McGlade agreed. Sales of casual sportswear, she said, "have improved a lot over the past few months, although there's probably a glut of career wear," which retailers banked on women buying.</br></br>Ms. McGlade said her index of 20 companies' sales for stores open at least a year rose 4.1% from last October, representing a 0.2% decline from September 1988 levels on a seasonally adjusted basis. After adjustments for inflation, which is running at about a 3.5% rate for general merchandise, Ms. McGlade's index shows just a miniscule increase. "In real terms, there's very little to no increase," she said.