Transcripts

Spring Spending Is Blooming Late This Year

JEFF YASTINE: The nation`s largest chain stores rang up lackluster sales in March. Retailers from Wal-Mart to Limited Brands said a late Easter stymied demand for spring merchandise. As Suzanne Pratt reports, the outlook for April is sunnier.

SUZANNE PRATT, NIGHTLY BUSINESS REPORT CORRESPONDENT: Retailers across the country blamed tepid March sales on the tardiness of the Easter bunny. Last year, the holiday fell in March. This year it comes three weeks later on April 16. Experts say the calendar shift makes for tough comparisons. Retailers also blamed mother nature as cold temperatures and rain dampened demand for spring fashions and other seasonal merchandise.

MICHELLE TAN, RETAIL ANALYST, UBS SECURITIES: It`s a little bit of a weather sensitivity thing. It`s a little bit of an Easter shift because people do tend to buy outfits going into the holiday. There are big promotions around apparel. And, also maybe there`s a little bit with the fashion.

PRATT: Few, however, blamed the consumer, even though gasoline prices are nearing record levels and interest rates keep heading higher. Experts believe the March weakness is a temporary thing, not the sign of a broad- based slowdown in consumer demand. To that end, Wal-Mart posted a 1.4 percent gain in sales, while Federated also disappointed. Nordstrom was one of the month`s few standouts. Gap experienced a hefty 13 percent drop in sales and teen merchant Abercrombie & Fitch also fell short.

CHRISTINE CHEN, SPECIALTY RETAIL ANALYST, PACIFIC GROWTH EQUITIES: The teen retailers are particularly susceptible to the spring break shift because their customer definitely shops the most right before and during spring break and so, you saw a lot of negative news come out of the teen space. And I would expect them to make that up in April.

PRATT: Experts say for most retailers the story should be the same: March`s loss will be April`s gain. They predict warmer temperatures and pent up demand for spring items will boost sales.

TAN: In general, we should see much better business in April. At this point, we think the apparel business will pickup. We think the juniors business, which has been a soft spot across the board, should pickup. Some of the schools had later spring breaks so some of that business gets pushed out into April.

PRATT: Despite the March weakness, retail stocks held up fairly well today. Analysts say that`s because the March softness was expected and because investors are lining up their positions for April. Suzanne Pratt, NIGHTLY BUSINESS REPORT, New York.