ECONOMY Dismal selling season makes shoppers smile

Merchants have been forced to discount warm-weather goods .
KNIGHT RIDDER NEWSPAPERS
AKRON -- The bikinis at Sears are squished together on the sale racks. The capri pants at Ann Taylor are piled high on the back discount wall. Shoe stores are jammed with half-priced sandals. Even Abercrombie & amp; Fitch, the teen store with price tags to clear a parent's sinuses, has marked down its summer shorts and T-shirts.
Although retail sales picked up somewhat in May and June, it didn't happen soon enough -- or in a big enough way -- to salvage what was a dismal spring selling season.
Merchants have been forced to discount their surpluses of warm-weather goods dramatically to make room for the fall merchandise that arrives in stores at the end of this month. And they aren't fooling around with measly 10 percent or 20 percent markdowns. Look for sales of 30 percent to 50 percent off on summer items.
Such earnest discounting usually doesn't begin until after the July 4th holiday. But this year, goods were significantly marked down by mid-June. And there will be even more price slashing until the end of July, when the autumn offerings roll in, experts say.
Retailers had counted on a late-season Easter holiday (which promotes sales of warm-weather clothing) and the ebbing of the fighting in Iraq to boost shoppers' confidence beginning in April, analysts said.
But unseasonably cold, wet weather and lingering fears of a shaky economy kept consumers in many parts of the country wearing last year's sweaters and sweat pants into June.
By the time the weather warmed up and dried out (sort of), the chances for a solid apparel season were shot -- at least from the merchants' point of view.
Browsing pays off
Self-proclaimed "fashion nut" Genette Simon of Akron said she was surprised by the sales on summer clothes when she visited an Akron mall recently. She had planned to just browse that day and come back in a few weeks to buy.
It didn't work out that way.
"I got three pairs of shorts and a couple of wife beaters for, like, $50," said Genette, 16. (Wife beaters are a nickname given to men's ribbed, sleeveless undershirts that are now worn by teen-age girls as outerwear.) "It was so freezing and rainy, I didn't want to buy anything for summer. I guess waiting paid off."
Although all sorts of summer gear -- such as grills and sprinklers -- are on sale, the deepest discounts are in apparel, where inventory was up 8 percent in the first quarter, dwarfing the sales gain of 2.9 percent, according to the federal government.
This spring, it took 1.6 months to sell merchandise, up from 1.54 months a year earlier and continuing a pattern of inventory buildup since October, the U.S. Department of Commerce said.
Anemic profits
Even Wal-Mart Stores Inc., known as the world leader in inventory management, ordered too much. Inventories at the nation's largest discounter were up 13.2 percent in the first quarter, but overall sales increased less than 10 percent. Wal-Mart's same-store sales were up an anemic 2.2 percent in April and 2.1 percent in May. Same-store sales are considered the best sign of a retailer's health because they include only numbers from stores open for a year or longer. Wal-Mart said it expects June same-store sales to have increased between 2 percent and 4 percent when the numbers are finalized and made public next week. Sales at other major retailers -- including Target Corp. and Sears Roebuck and Co. -- were significantly off the mark.
And the healthy-looking sales numbers that some retailers reported this spring were, for the most part, driven by profit-busting discounts, Niemira said.
But a store's loss can be a savvy shopper's outfit for Friday night.
"There's a lot of inventory in the stores, and that means more promotions," said Dan Butler, vice president of retail operations for the National Retail Federation, a trade group in New York City. "It's a fine time for shoppers."
Try to keep that comforting notion in mind if the weather turns cool and rainy this month. The summer could end up a soggy and chilly disappointment, but at least the bargains will be hot.