War and the weak economy kept consumers out of the stores again in January, giving many of the nation's biggest retailers a dismal end to a disappointing fiscal year.
Several retailers said yesterday that their January sales at stores open more than a year fell in comparison with year-earlier results: those retailers included Sears, Roebuck and Co.; J.C. Penney Co.; May Department Stores Co.; Limited Inc.; and Carter Hawley Hale Stores Inc.
Discounters Wal-Mart Stores Inc. and Kmart Corp. fared somewhat better, an indication that budget-conscious consumers were searching for lower prices.
"The weakness was evident across the board ... and was geographically broad-based," said Jeffrey Feiner, a retail industry analyst with Merrill Lynch & Co.
The beginning of the gulf war, while long anticipated, further dulled already lackluster sales.
Store traffic "started off sluggishly, it died the first week of the war, and then it picked up to a sluggish trend," said Jeffrey Edelman, an analyst with the Barclays de Zoete Wedd Inc. investment company.
January, the final month for the retailing fiscal year, is considered the least significant month on the calendar. Even in the best of years, consumers spend lightly after Christmas while stores discount winter merchandise.
"A lot of sales increases we saw were functions of seasonal clearances," Edelman said.
But 1990 was far from the best of years, and 1991 has not started off well. There has been a wave of bankruptcy court filings by retailers, including Hills Department Stores Inc. and Best Products Co. Bond rating companies have recently downgraded their opinions of Carter Hawley Hale, a major retailer on the West Coast, and of Sears. Lower ratings make it more expensive for the companies to borrow.
Carter Hawley has also has been the subject of speculation that it is on the verge of filing for Chapter 11 bankruptcy court protection.
Yesterday, the New York Stock Exchange said the firm will miss $22 million in interest payments on its junk bonds next week. The price of those bonds dropped sharply during the day's trading.
Carter Hawley Hale spokesman Bill Dombrowski declined to comment on the NYSE statement or on whether the Los Angeles-based company could meet the payments.