Why shoppers can expect Christmas-like deals at their local malls
By Lisa Fickenscher | The New York Post
With spring less than a week away, shoppers may be surprised to find Christmas-like sales at their local malls.
At the Marketplace Mall in Rochester, Macy’s was recently advertising Martha Stewart bath towels at just over $5 each for coupon clippers, down from $20. JCPenney, meanwhile, has been hawking 80-percent discounts online, as well as at its stores across the country.
That’s partly because Macy’s and JCPenney — as well as Sears, Kmart and a number of other major US chains — are starting to make good on their promises to close hundreds of stores in the coming months.
The resulting liquidation sales, in turn, promise a bonanza for savvy consumers — and a threat to other retailers who have no plans to exit their real estate.
“We are in for a wild ride,” said Gabriella Santaniello, founder of A Line Partners, a retail research firm. “This is a massive, unprecedented wave of store closures, and when a Macy’s closes, it has the ability to impact every retailer in the mall.”
Even discounters like DSW — where a pair of Steve Madden Richelle sandals goes for $69.95, or about $40 less than at competitors — may be forced to drop their prices further in the coming weeks as a glut of cheap goods floods the country.
One Wall Street analyst, Patrick McKeever of MKM Partners, expressed concern this week about DSW’s performance as “deeply discounted merchandise floods the marketplace,” pointing to the rash of department store closings.
“The liquidation sales,” wrote McKeever in a research note, “could pose an additional challenge” on top of DSW’s already weak holiday season, which spurred a 7-percent drop in the chain’s fourth-quarter sales at stores open at least a year.
Macy’s has begun to close 68 of 100-plus stores it has identified as underperforming. Most of them will be shuttered by April, said a spokeswoman for the company.
The closeout sales, which can last up to 12 weeks and include merchandise that is up to 90 percent off at the end, are putting the squeeze on other retailers with new shipments of full-price spring and summer duds on their shelves.
Late last month, JCPenney announced it will close up to 140 stores over the next few months, but it has not yet identified which ones will get the ax. Sears and Kmart, meanwhile, are closing at least 150 stores this spring.
The volume of merchandise that’s sold during these sales is comparable to Christmastime amounts, Snyder said, with retailers’ sales increasing 200 to 400 percent over a year ago.
”We sell everything in the store, and some of the stuff is new goods that have just come off of ships from China,” Snyder said, adding that “there is no question that retailers like DSW will feel the pain.”
In the long run, retailers that weather the storm of store closings have an opportunity to gain new customers, said Craig Johnson of Customer Growth Partners, a retail consulting firm.
“When Sports Authority cratered a year ago, it hurt Dick’s Sporting Goods,” Johnson said. “But ever since, it’s been good for Dick’s.”