Round-Up: Retail CEOs Bullish on Black Friday
Worries about the consumer and the economy have investors on edge about the retail sector. Nevertheless, CEOs from some leading retailers are remaining upbeat.
"We all recognize we're going in at it with the consumer a little bit on the edge here and having their own level of concerns," said Terry Lundgren, chief executive officer of Macy's, on CNBC Friday morning. "Having said that I was here at 5 o'clock this morning along with 5,000 people waiting outside of Macy's Herald Square, so that doesn't look to me like a slow down from previous years. We'll see what happens as the day goes but seeing this store and from the reports we've gotten from others it's a good early start so far today on Black Friday."
Of course, discounting is probably a big draw, Lundgren conceded. "We're definitely giving more discounts," he said. (Click here to see his full interview)
He dismissed concerns about the credit markets, a key factor for retailers that rely on financing for inventories. "In our case we're in good shape," he said, adding that the store chain has a strong cash position and good relationships with its banks.
"Our business has been terrific," said Tom Vellios, Five Below CEO and co-founder of the chain that specializes in offering items for less than $5. "We're coming off very strong year last year and we're having possibly the best year we've had so far. So we're quite bullish on Christmas
and the holidays." (See his full CNBC interview here)
His flagship store opened at 6 a.m., he said, and there was a line waiting.
Toys R Us
The line at the Times Square Toys R Us store in New York started to build at 9 p.m. thanksgiving evening, said Gerald Storch, Toys R Us chairman and chief executive officer.
Toys, he told CNBC, are recession resistant because for many parents they are not discretionary. "The bottom line is hot toys are hot," he said.
Those who are already seeing disappoint in retail numbers so far are making an error, he claimed.
"One of the differences this year that you have to remember is that Thanksgiving came a week later," Storch said on CNBC. "And so a lot of people I believe are making an analytical error ... you have to be sure you are comping the sales to the right week. Thanksgiving happened a week ago last year. So now this holiday season is just kicking off right now."
Mall of America
Unlike malls in some part of the country, Mall of America has continued to see higher sales levels, according to Maureen Bausch, vice president of Business Development at Mall of America, the nation's largest retailer and enternment center.
"While I think people will be making more thoughtful purchases, they will purchase," Bausch said. (To hear the full CNBC interview, click here.)
She said retailers at Mall of America have seen an increase in sales of personal care products and in "thoughtful gifts that will last many years." One such example the popular American Girl dolls.
Bass Pro Shops
At Bass Pro Shops, shoppers have been buying apparel, according to Johnny Morris, founder of outdoor sporting goods retailer. Other popular categories are fishing and camping gear, he said.
"We see things going pretty good right now," Morris said.
"It's really across the board. Right now, it's hunting season," said James Hagale, Bass Pro Shops CEO.
But FAO Schwarz CEO Ed Schmults said it has been a "difficult" season.
"Traffic has been very strong this week, but our conversion is not what we wanted it to be," Schmults said. (Watch the full interview here.)
The toy retailer has been shifting away from its focus on luxury toys to focus more on "quality" toys, and has been more promotional this year than it has in years past.
"(Interestingly,) our best-selling toys are not necessarily the lowest priced toys," Schmults said.
Among the top-selling items is a Muppet Whatnot, a Muppet-style puppet that can be customized by the recipient, which sells for $130.