Store Promotions On the Rise

NEW YORK — As the spring selling season goes into markdown mode, retailers are getting aggressive with promotions.

Major department stores appear to be leading the way. Last week, Footwear News surveyed the bigger stores and found that Bergdorf Goodman had 50 percent off on many of its women’s shoes. Saks Fifth Avenue was knocking an additional 33 percent off already reduced merchandise. At Macy’s Herald Square flagship in New York, shoppers could get a 10 percent-off coupon for selected merchandise already discounted between 25 and 50 percent. And both Barneys and Neiman Marcus were offering an extra 25 percent off selected sale items.

“[Discounts] may even be close to what they were in early fall of last year,” said Ken Perkins, president of Retail Metrics, a retail research firm, speaking of the highly promotional environment stimulated by last year’s financial collapse.

Whether that leads to more traffic — and sales — remains to be seen. At the sneaker store Atmos in New York, for instance, manager Paul Lee said markdowns have brought in more people.

“Customers were scared to come in because the storefront looks very boutique-like,” said Lee, “but since they’ve seen sale signs, they’ve been coming in a lot more.”

Bobby Lozier, GM at Hawley Lane Shoes in Connecticut, said the store is offering 50 to 80 percent off merchandise and additional $5 to $20 coupons, which are bringing in more new customers.

Daniel Hanig, buyer at Hanig’s Shoes in Chicago, said 20 to 50 percent markdowns at his store have also kept business moving. “Foot traffic has been fairly steady, except for some weather problems.”

Several factors are working against retailers this season. Last week, the U.S. Department of Labor reported that more jobs were cut in June than originally forecast, and the unemployment rate hit the highest mark in more than a quarter of a century. What’s more, erratic weather patterns across the country have kept people from shopping.

As a result, store sales have been mixed. Tip Top Shoes in New York is relying on markdowns of up to 70 percent to inspire customers to spend. However, owner Danny Wasserman said bad weather has hurt results.

“There is certainly a sale customer out there,” he said. “[But] it’s very difficult to judge how effective this sale is going to be on seasonal product, because there is no season.”

Still, retailers have to contend with their larger competitors.

“We couldn’t tell [if the discounts brought in customers] because we reacted immediately to the department stores,” said Dan Goodman, co-owner of Eilatan stores in California. “We must match the department stores — we’re forced into it.”

Atmos has seen competition from neighbors Foot Locker and Champs. “It seems like they are really pushing for big promotional events,” Lee said. “That’s the only way they can draw in customers.”

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