Business torrents

A cool, soggy June dampened sales at some major retail chains in Canada, and though they continued to fare better than their American counterparts, there were few bright spots in the data.

Even warehouse club operator Costco Wholesale Corp. said same-store sales fell in June as U.S. consumers continue to worry about future job losses.

TJX Cos., which owns discount designer stores Winners and HomeSense in Canada, said sales at its stores, including those in the U.S., rose 4 per cent in June.

But mall-based teen apparel stores, such as Abercrombie & Fitch, fared poorly, leading analysts to speculate Wal-Mart Stores Ltd. was the beneficiary.

Wal-Mart has stopped reporting monthly sales.

Toronto-area malls were covered in "sale" signs yesterday as retailers try to clear out seasonal merchandise.

While that’s not unusual at this time of year, clothing sales have been particularly hard hit by an unseasonably cool start to the summer.

Canadian lingerie retailer La Senza saw same-store sales plunge 10 per cent in June, parent company Limited Brand said yesterday. While that wasn’t as bad as the 14 per cent decline at its U.S. sister chain, Victoria’s Secret, it’s hardly cause for celebration.

"The U.S. retailer has definitely been hit a lot harder," said John Williams, a retail consultant with the Toronto firm, J. C. Williams Group.

The story was similar at warehouse club discounter Costco, where same-store sales last month were down 3 per cent in Canada and 6 per cent in the U.S.

At The Children’s Place Retail Stores Inc., same-store sales in Canada fell 5 per cent, less than half the 12 per cent decline in the United States, the parent company said bad credit car loans.

Same-store sales, considered a key measure because they compare sales at stores open more than a year, were down 5.1 per cent overall for U.S. retailers, according to International Shopping Centre Council-Goldman Sachs data.

Canadian-owned retail giants do not publish monthly sales figures, making broader comparisons difficult.

In the U.S., the weakness appeared to cut across all sectors, analysts said, so the latest data could mean considerably more price discounting during the back-to-school season.

"We don’t see signs of recovery. This is not going to be a consumer-led boom any time soon," said Michael Dart, a retail strategist and leader of private equity practice for consulting firm Kurt Salmon Associates.

Ken Perkins, president of retail consulting firm Retail Metrics LLC, noted the June retail reports indicate that many parents will forgo brands in favour of the lower-priced items and will buy less overall.

"There will be a continued focus on need-based and discounted items," Perkins said.

Department stores like J.C. Penney and Macy’s Inc. continued to face declines, though June’s were milder than analysts forecast.

Among U.S. specialty retailers, Gap Inc., which operates Gap, Old Navy and Banana Republic stores, said North American same-store sales fell 10 per cent in June.

Same-store sales at its higher price Banana Republic stores fell 20 per cent, while its cheaper Old Navy brand declined 7 per cent, the company said. Gap Inc. did not provide separate data for Canada.

With files from the Star’s wire services

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