Retail Sector May Be Stabilizing, Telsey Says

Monthly sales reports due out from more than 50 retailers for March should show signs of stabilization in the sector, said Dana Telsey, Telsey Advisory Group chief research officer.

“I think we’re going to hear from some of the companies a little bit about sales stabilization,” said Telsey. “We’re finally seeing inventory levels come down so much that you can’t have sales continue to weaken at the dramatic pace that they had been.”

Companies reporting over the following days include Gymboree, American Eagle, Staples, Abercrombie and Fitch, Macy’s, Saks and JC Penney.

Despite sales stabilization, Telsey says that consumers are still spending carefully.

• See what else Telsey had to say about retail's stabilization

“We are seeing that traffic numbers in the month of March have improved. As a matter of fact, it even improved with less goods on sale,” Telsey said. “We’re seeing clearance signs begin to hit the stores now and yes, that is a sign that things are getting a little bit better, but it’s certainly not the fact that they’re spending at full price, consumers are very watchful.”

Reduced consumer spending means a decrease in luxury goods sales, which Telsey noted was suffering.

“Certainly these days, luxury is a problem area, with the drop off in the high-income consumer. We’re seeing luxury good sales slow,” Telsey said. “In addition, the apparel retailers, where you don’t have anything so new in terms of fashion product, needs to be stimulated.”

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