"Black Friday is not the biggest shopping day of the year - that honor is held by the days immediately preceeding Christmas," notes Holly Guthrie, mall-watching retail-stock analyst at Boenning & Scattergood in West Conshohocken.
Still, the Friday after Thanksgiving ranks in the Top 10 shopping days. Plus, it's interesting to see what shoppers are responding to, and ignoring, this close to the end of the year. So Guthrie headed north to the giant King of Prussia shopping center, and spent 10 hours hitting her favorite publicly-traded chain stores, counting heads, checking prices, and kibitzing with customers and front-line staff.
Summary: By giving more stuff away, stores were able to lure more shoppers - but not enough to replace lower profit margins. "Coming out of Black Friday 2009, we believe that, although many retailers did experience an increase in traffic, few will be able to translate those gains into sizable profit increase."
Higher sales are canceled by "increased promotions" - a quarter of stores boosted advertised discounts, while only a few - Lane Bryant, Bebe, White House - cut back on such promotions. Two chains that likely profited nevertheless are Urban Outfitters and Guess, which have relatively high gross margins that benefit from any increase in trade.
- "The stores that had the most sizable increase from the previous years in traffic were American Eagle and Urban Outfitters." Those chains, plus Aeropostale, Express, Forever 21 and Guess, also had "long lines" and "more than 50 customers in the store... during the entire day". (Boenning has an "Outperform" on Urban Outfitters and is "Neutral" on American Eagle.)
- "The greatest increase in the number of customers in line was seen at Arden B, Bebe, Hot Topic and Urban Outfitters." (Boenning likes Hot Topic and is neutral on Bebe).
- "The stores that had the most sizable decreases from the prior year in traffic were The Buckle, Fossil and J. Crew", which didn't run promotions. Also weaker, despite promotions: Pacific Sunwear (PSUN) and New York & Co. (NWY). And Victoria's Secret dropped off the "long lines" list.
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