Newspaper article The Christian Science Monitor

Hard Times Sweep Stores as Retail Problems Mount

Newspaper article The Christian Science Monitor

Hard Times Sweep Stores as Retail Problems Mount

Article excerpt

AS other retailers are wondering how they'll get by in these lean times, Sears, Roebuck & Co. is expanding. Bolstered by strong sales, Sears plans an ambitious $4 billion upgrade; 22 full-service stores will open or relocate in 1996.

Sears was a happy exception to the overall trend last year.

For the retail industry as a whole, 1995 turned out to be "catastrophic," says Kurt Barnard, president of Barnard's Retail Consulting Group in Scotch Plains, N.J. "General-merchandise and apparel chains really took it on the chin in December. Sales were terrible across the board. This was their first downturn during the Christmas holiday period not attributed to a recession."

Sales by general-merchandise and apparel stores fell slightly in December, the Commerce Department reported Tuesday. Overall retail sales, including cars, rose a modest 0.3 percent, down from a 0.7 percent in November. For 1995 as a whole, sales rose 4.9 percent, the smallest annual gain since 1991. Even major discounters such as Wal-Mart and K mart were affected.

A sharp drop in consumer confidence was also reported Tuesday. Debt levels and economic uncertainty are high.

"There are too many stores and too little demand," says Catherine Rooney, a retail specialist at Pitcairn Trust Company in Jenkintown, Pa.

"1996, unfortunately, is going to be a mirror image of 1995 - except a little worse," Mr. Barnard says. He notes that already two major chains have filed for bankruptcy this year: Rickel Home Centers, in South Plainfield, N.J., and Barney's, a New York men's apparel chain. Last year saw three major bankruptcies: Caldor, Bradley's, and Jamesway.

The retailers showing market clout, he says, are "upscale" firms such as Tiffany and Gucci's.

"This is going to be a tough year for retailers," Ms. Rooney says. The trend toward restructuring that has characterized the retail industry in recent years will continue. …

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