Sector Snap: Apparel retailers shares fall

NEW YORK (AP) — Shares of apparel retailers fell on Wednesday, a day before many are scheduled to report December same-store sales, which are expected to be weak.

Same-store sales are an important retail performance metric because they measure growth from existing stores rather than newly opened ones. December sales are especially important because retailers make 30 percent to 50 percent of their annual sales during the holiday season.

As consumers cut back on discretionary spending, apparel has been a hard-hit sector, particularly women's or "missy" apparel. Teen and children's apparel retailers have been buffered somewhat as parents cut back on themselves rather than their children.

Analysts say December results will likely be better than November as consumers stepped up shopping in anticipation of Christmas and Hanukkah. But sales are still expected to be soft.

Same-store sales fell 2.1 percent in November and are expected to fall 1 percent in December, according to a poll by Thomson Reuters.

Roth Capital Partners analyst Elizabeth Pierce said in a note to investors on Tuesday that traffic and buying picked up "significantly" in the days after Christmas, but added the lift was likely not enough to compensate for weak sales plaguing the sector since Thanksgiving.

She said two teen apparel retailers, Hot Topic Inc. and The Buckle Inc., are likely to be two of the best performers in December.

However, she expects most apparel retailers to report negative same-store sales.

"Overall, Holiday 2008 was the year that the Grinch did steal Christmas and it will likely go on record as being one of the worst seasons in decades," she wrote.

Shares fell across the sector during afternoon trading.

Gap Inc. shares fell 44 cents, or 3 percent to $13.80. Limited Brands shares fell 10 cents to $10.87. J.Crew Group Inc. shares fell $1.87, or 14.4 percent, to $11.16.

Talbots Inc. shares fell 23 cents, or 7.4 percent, to $2.89. Abercrombie & Fitch shares fell 77 cents, or 3.1 percent, to $23.77. Urban Outfitters shares fell 49 cents, or 3.3 percent to $14.31.

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