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Saks losses mount as slump worsens in US

Department store business Saks was among a swathe of chains to suffer a drop in second quarter sales, as the credit crunch tightens its grip on the US retail market.

Saks fell further into the red with a loss of US$31.7 million (£17m) for the second quarter to August 2. Sales for the period dipped to 3.6% to US$669.2m (£360.2m). Like-for-like sales were down 4%.

At department store chain JC Penney, like-for-like sales fell 4.3% for the second quarter to August 2, while upmarket department store Nordstrom’s like-for-likes dropped 6%.
Middle-market womenswear chain New York & Company’s sales fell 2.2% for the quarter to August 2. This compares with a 4.9% increase for the same period of the previous year.

The US young fashion market has not been immune, with sales at casualwear chain Abercrombie & Fitch down 4% for the 13 weeks to August 4.

Separately, in a further sign that the value sector has more hope of beating the downturn, US teen fashion business Tween Brands will convert almost 560 of its Limited Too stores to its lower-priced Justice fascia.

The move is intended to drive growth and profitability at the business, which targets seven- to 14-year-old girls with fashion basics and lifestyle ranges.

The conversions, due to be completed by the end of the first quarter of next year, will almost triple the number of Justice stores from the current 310.

Chief executive Mike Rayden said: “This is a bold strategy to capitalise on the tremendous success of Justice and changing trends in our economy and our customers’ preferences. Especially in these tough economic times, our customers seek the more value-oriented clothing available at Justice, which is priced about 20% to 25% lower than Limited Too.”

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