[WEEKLY RETAIL REPORT ARCHIVES]

San Francisco, CA (March 20, 1997) -- The reporting of monthly retail sales figures has been around for decades. Old time national retailers like SEARS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: S)") else Response.Write("(NYSE: S)") end if %> and J.C. PENNEY CO <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: JCP)") else Response.Write("(NYSE: JCP)") end if %> have reported these monthly numbers as far back as many can remember. However, one of the downsides of this long-standing practice is the monthly numbers do not always give a complete picture of the entire business. Whether a company hits or misses monthly estimates seems to affect the volatility of a stock price to a greater degree than earnings.

Over the last decade many smaller companies that are not "followed" by investment houses have enjoyed the increased visibility that reporting monthly sales numbers creates, but many companies that recently went public have refrained. LOEHMANN'S <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: LOEH)") else Response.Write("(Nasdaq: LOEH)") end if %>, ABERCROMBIE & FITCH <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ANF)") else Response.Write("(NYSE: ANF)") end if %>, and MARK BROS. JEWELERS INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MBJI)") else Response.Write("(Nasdaq: MBJI)") end if %> elected to join retailer HOME DEPOT <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: HD)") else Response.Write("(NYSE: HD)") end if %> and not report such numbers. Some companies which have seen monthly sales declines may hop on the bandwagon with BEST BUY INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BBY)") else Response.Write("(NYSE: BBY)") end if %> that announced it would end the monthly reporting of these figures and only report quarterly figures, beginning in fiscal 1998. Retail is the only sector that the street demands these figures from, which are reported the first Thursday of each month. It may turn out that we see the widespread monthly reporting practice dwindling in the future.

More romance news in the OFFICE DEPOT <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ODO)") else Response.Write("(NYSE: ODO)") end if %> and STAPLES <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SPLS)") else Response.Write("(Nasdaq: SPLS)") end if %> on-again, off-again marriage. Voila! A menage a trois has been arranged with OFFICEMAX INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: OMX)") else Response.Write("(NYSE: OMX)") end if %>. In the attempt to block the antitrust lawsuit, Office Depot and Staples agreed to sell 63 stores to their remaining major competitor, OfficeMax. This deal, worth $109 million to the new combined entity, is intended to overcome objections posed by the FTC on grounds that the original merger deal would violate antitrust laws and bring higher office supply prices to consumers.

Spring Sneaker Fever

The 22nd Annual Odor-Eaters(R) International Rotten Sneaker Contest at Montpelier, Vermont, the self-proclaimed Rotten Sneaker Capital of the World, opened this week. According to the press release, "tattered tops, holey soles, frayed and knotted shreds of laces, and tongues that droop forlornly are magically held together by a primordial ooze and pungent odors." One contestant confided, "My mom makes me keep my sneakers in the garage...in a plastic bag." This foul-smelling footwear, naturally worn and torn, will be paraded past a panel of distinguished and experienced judges. Prizes include a $500 savings bond, a year's supply of Odor-Eaters products, new NIKE <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: NKE)") else Response.Write("(NYSE: NKE)") end if %> sneakers, the Golden Sneaker award and enshrinement of the winning sneakers in the Odor-Eaters Hall of Fumes.

This ritual of spring seems well-timed as sneaker manufacturers and retailers made news this week. JUST FOR FEET INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: FEET)") else Response.Write("(Nasdaq: FEET)") end if %> is acquiring two athletic footwear and apparel retailers, Florida-based Athletic Attic (for about $9.2 million in cash and about $5.5 million in Just For Feet common stock) and Imperial Sports (for between $25 and $30 million in common stock). These acquisitions are in line with Just For Feet's continuing expansion into the smaller store market. Athletic Attic had net sales in its 30 stores of about $23 million and pretax income of $1.5 million. Imperial operates 56 stores in Michigan, Illinois, Indiana, and Ohio, and had net sales of about $45 million and pretax income of $ 3.4 million. Just For Feet presently operates 37 superstores, specializing in brandname athletic and outdoor footwear in 10 states.

However, this news was not enough, as Just For Feet stock hit a 52-week low. Wall Street was concerned about the other news that Feet announced, which was a change in the company's perceived aggressive accounting method. Restated earnings showed net income was down for the first three quarters. Basically the restated earnings needed to reflect amortizing store preopening expenses upon the store opening, not over the 12 months following. In the long run, this accounting difficulty may not be enough to keep this stock down. If the strategic decision to acquire smaller stores rather than building new stores is successful, Just For Feet may be walking on air. At the close of today's session, shares of Feet closed at $18, having touched a low of $17 5/8.

This week Morgan Stanley upgraded STRIDE RITE CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SRR)") else Response.Write("(NYSE: SRR)") end if %> to a strong buy from neutral. This jump by the investment house was fueled by the belief that Stride Rite's long-awaited turnaround is underway. For the fiscal year ending November 11, 1996, net sales fell 10% to $448.3 million. Net income totaled $2.5 million, versus a loss of $8.4 million. The company suffered from lower revenues in the wholesale divisions, due to lower unit shipments of current line merchandise. Earnings reflect a decrease in interest expense and the absence of a $16.6 million restructuring charge.

However in light of those numbers, analysts are looking for the manufacturer and retailer of athletic and casual footwear to earn $13 million, or $0.26 a share, on revenues of $490 million in 1997. In addition, expectations are that sales will grow 14% annually over the next three years and earnings to expand to $7.6 million in 1999. The company will finally see the obsolete inventories of the Ked's division diminish, and many believe that the well-advertised recent launch and early success of TOMMY HILFIGER CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: TOM)") else Response.Write("(NYSE: TOM)") end if %> footwear manufactured by Stride Rite will be a major force in this turnaround. Finally, the Lexington, Mass.-based company has a strong balance sheet with 3% total debt to capital. The stock that was selling in the $8-9 dollar range for months, closed today at $14 3/8.

Nike, the master of the athletic universe, announced after U.S. markets closed Thursday, its third quarter net income rose 77%, easily beating analyst's expectations. These numbers were attributed to margins improving and orders rising sharply. Sales rose 53% to $2.42 billion, the Beaverton, Oregon-based company said.

The footwear, apparel and accessories mega giant said its earnings were $237.1 million, or $0.80 a share, which was eight cents better than the mean estimate of analysts surveyed by First Call. In the same quarter a year ago, the company earned $133.9 million, or $0.45 a share. Domestically, athletic footwear and apparel revenue for the quarter leaped 51% to $1.34 billion. International athletic footwear and apparel revenue increased 67% to $982.9 million, the company said. On the downside, revenue from other brands, which include Bauer, Cole Haan, Tetra Plastics and Sports Specialties, fell 3% to $102.3 million, Nike said. Shares of Nike closed at $67 1/2.

Metropolitan Home

Even savvy consumers, doing their homework and looking at brand names, can find shopping for furniture a frustrating experience. Unlike other big purchases, you can't plug furniture in and listen to it or take it for a test drive, or check out the consumer guide. Most Americans try to buy the best quality they can afford and furniture they really love. Where the 80's saw opulence and grandeur in all types of areas of fashion and home furnishing, the 90's has emerged as the cozy, warm and comfortable decade. Many retailers are beefing up their home furnishings offerings in response to what is seen as changing consumer attitudes. Even this past holiday season saw a trend away from consumer electronics and toward home furnishings. Americans today are spending money furnishing their homes, and some businesses are profiting. Let's examine four retailers from varied ends of the home-furnishing spectrum.

HEILIG-MEYERS CO. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: HMY)") else Response.Write("(NYSE: HMY)") end if %> has found its niche in the rural areas of the Southeast and Midwest, selling moderately priced home furnishing. From furniture and accessories to electronics, appliances, bedding, and lawn mowers, this is one-stop home shopping. Through offering customers in-house credit, free delivery and repair services, the company generated 70% of fiscal 1997 sales through business of existing customers.

At the end of last week, this Virginia-based company said it expects the fourth quarter to be very strong. The home-furnishings company believes its figures for the fourth quarter will be higher than Wall Street estimates, due to stronger sales and improved operating margins. Company expected earnings to be above that current $0.14 a share that analysts were projecting for the fourth quarter, and above the $0.74 a share estimates for the year. The release of annual results will be published later this month. Impressively, overall sales rose 57.6% last month, compared with a year ago.

However, it must be noted that of the additional $50 million in revenues, $36 million is attributed to the recently acquired 105 Rhodes unit. Last month, a period not known for its general strength in home related purchases, was successful for the company as profit margins improved and more credit customers paid on time, boosting the February numbers. The retailer, through its wholly owned subsidiary, Macsaver Financial Services, issued 100 million of senior notes to the public bond market. Proceeds will be used to pay down short-term bank debt, therefore increasing the percentage of long-term fixed rate funding and further strengthening Heilig-Meyer's capital structure.

As of Jan. 1 this corporation operated 795 Heilig-Meyers and 105 Rhodes retail furniture stores in 32 states. In Puerto Rico, the company operates 32 Berrios retail furniture stores. The company also plan to acquire in a stock transaction the RoomStore, a 10-store operation in the Dallas area.

Monday, Raymond James & Associates, Inc. raised its rating of the furniture retailer to buy from neutral. At the close Heilig-Meyers, was trading at $17 3/8.

WILLIAMS-SONOMA <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: WSGC)") else Response.Write("(Nasdaq: WSGC)") end if %> is a specialty retailer of cooking and serving equipment, home products, home furnishings, and home and garden accessories. There are 240 retail stores, five mail-order catalogs, and direct marketing. The retailer sells its products under Williams-Sonoma, Pottery Barn, Hold Everything, Garden's Eden, Chambers, and California Closets names. The company also has a line of Williams-Sonoma brand food products.

Chairman W. Howard Lester announced record sales and net earnings for the fiscal year ending February 2, 1997. He noted that the company had an excellent fourth quarter and that the company had demonstrated the ability to set objectives regarding improved profitability and operational execution. The company's estimates were $0.75-$0.80 a share, the company reported $0.86 a share and the street was surprised. For fiscal 1997, the company reported net income of $22.7 compared with $2.5 million in fiscal 1996. Revenues jumped 26% to $811.8 million. In fiscal 1996, an additional six Williams-Sonoma stores were added and seven Pottery Barns.

It is in the Pottery Barn, and through the mail-order catalogue, that furniture is sold. A young couple could walk into a Pottery Barn today, furnish their entire apartment from a bed, to a rug, curtains, paint, glasses, and use a professional staff trained to help. It is my opinion Pottery Barn is the fastest growing part of this retail segment. Williams-Sonoma has kept its merchandise, marketing, and stores upscale and utilizes its mail order catalogues as a constant advertising tool to get local customers into all their stores.

EVEREN Securities, Inc. said a week ago that it raised its estimate of this San Francisco-based retailer for fiscal 1998 to $1.15 a share from $1.10, and the estimate for fiscal 1999 to $1.40 from $1.39. In addition, the investment rating was raised from market performer to outperform, setting a price target in six months of $35 a share. At the close today the stock traded at $32.

PIER ONE IMPORTS INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: PIR)") else Response.Write("(NYSE: PIR)") end if %> is North America's largest specialty retailer of imported decorative home furnishings, gifts, and related items, with 728 stores in 47 states, Puerto Rico, Canada, the United Kingdom, Mexico, and Japan. Pier One last week reported that sales for the month of February rose 21.7% adjusted to compare four weeks. For the fourth quarter, sales were up 24.5%, based on a 13-week comparison. Clark Johnson, Chairman and CEO, said "February sales were the continuation of robust revenue gains that the company has experienced for the last 18 months. Pier One Imports completed the successful elimination of its apparel merchandise category and entered fiscal year 98 as a true specialty retailer of decorative home accessories."

In addition, the Ft. Worth, Texas-based retailer, is targeting earnings growth this year near the high end of its annual objective of 15-18% over the life of a five-year business plan. Compared to the posted fiscal sales of 1996, the company forecasts the sales will rise about 100 million. At a recent Raymond James conference, the investment house projected 1997 earnings of $1.25 a share, up 19% from $1.05 posted for fiscal 1996 which ended Feb. 28. Pier One 's board of directors delighted investors by approving a quarterly dividend of 4 cents a share on common stock.

As mentioned, starting March 1 Pier One stopped selling apparel and is launching a bridal registry program expected to take further advantage of the trend toward higher sales of furniture, fixtures and other items for the home. Increased customer traffic has also been accredited to a new national television campaign and emphasis on customer service programs. On the issue of expansion, the CEO said that the company would eventually like to have about 200 stores in Japan. Pier One closed today at $17, on thinly traded volume.

Clearance Rack

THE BOMBAY CO. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BBA)") else Response.Write("(NYSE: BBA)") end if %> is a specialty retailer of home furnishings through its chain of 434 retail stores in the United States and Canada. In 43 states, and 10 Canadian provinces, 90% of the company stores are in major shopping malls. This Fort Worth-based retailer saw its earnings drop by 25% in the fiscal fourth quarter. For fiscal 1996 per share earnings were $0.27 compared to $0.23 in 1997. The per-share result was three cents below the mean estimate of analysts surveyed by First Call. Net income was almost $3 million less, which mirrored the same $3 million in sales. The company says revenues suffered from the absence of the Alex and Ivy division, which was sold.

The retailer specializes in traditionally styled wood furniture, wall decor, and accessories. Almost all of the furniture has to be put together and assembled by the purchaser. They are reproductions of dark wood English furniture. Unfortunately the market for this look is very limited. Glass, light wood, and metal have become more the style desired in contemporary furnishings and Bombay has not moved in that direction. The stock that was once trading at a 52-week high of $11 7/8 today closed near its 52-week low at $4 3/8.

Another retailer which is paying attention to this interest in buying home furnishings is SHARPER IMAGE <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SHRP)") else Response.Write("(Nasdaq: SHRP)") end if %>. The retailer and mail-order company announced it was discontinuing its spa collection and focusing on more home furnishings and developing new products.

Weekly Update

Shares of DESIGNER HOLDINGS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: DSH)") else Response.Write("(NYSE: DSH)") end if %> fell today almost $3 to $7 3/4 when it was announced that the company expects to report fiscal 1997 net income of between $0.90-$0.95 a share, below street expectations. In addition the apparel maker also lowered its sales expectations after deciding to tighten the distribution of certain products. Perhaps if the Calvin Klein brand is marketed in limited stores, it could help this company in the long run, as more exclusivity often increases long-term profitability, and does not dilute the brand name.

Today luxury retailer GUCCI <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GUC)") else Response.Write("(NYSE: GUC)") end if %> reported early that net income for the fiscal year ending January 31 soared to between $158-$168 million or $2.60 to $2.76 a share, up from prior years earnings of 81.4 million or $1.65 a share. The stock traded up $5 3/8 to close at $74 7/8.

Remember your plastic -- "We never leave Fooldom without it."