Article Excerpt:
TWST: Would you begin with an overview of your retail coverage?Mr. Stinson: I cover the broadline and off-price sectors in retailing. That would include the department stores, discounters, warehouse clubs and also off-price retailers such as TJX (TJX) and Ross Stores (ROST).
TWST: Let's start with the broadline guys. How did they do in 2004, and
what's the outlook for 2005 and beyond?
Mr. Stinson: 2004 was not a bad year for the sector in general. We saw a
very strong start to the year in the spring season, very good early
sell-throughs, strong gross margins and big year-over-year sales gains
compared to 2003 when they were going up against the buildup to the Iraq
war. As we moved into the back half of the year, things slowed down a
little on the margin. We had some lull in the business before the
holiday season, but in the end we saw sales pick up pretty briskly the
closer we got to Christmas and right after Christmas. In the end, I
think most retailers will look at 2004 as a pretty good year.
Interestingly enough, as we move into 2005, one of the big themes within
my group, particularly the department stores, is consolidation. We've
seen it with the Sears (S) and Kmart (KMRT) merger that was announced in
November, which will close in March. Then we heard kind of rampant
speculation as far as other combinations in the department store
industry, such as May-Federated and the potential split up of someone
like Saks, Inc.
Tickers included in this excerpt: ACN, BJ, COST, EL, FD, JCP, JWN, KMRT, KSS, MAY, ROST, S, SKS, TGT, TJX, WMT
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