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    MARKET EDGES

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Today's 4%+ comp numbers hide how bad things are in apparel land. While the numbers appear consistently bad with 6 out of 7 consecutive down months, they were down 13 months ending Nov 1991, and 16 months ending June '03.


Thank you Wal*Mart. You're the only thing that came remotely close to keeping the RTH's head above water today. The MVRX (a better gauge for the apparel retailers as it is equal-weighted) was down a whopping 3.49%. But with the help of a 5.8% ex-gas comp, WMT was ONLY down 80bps.

Were sales results bad? Yes and no. In aggregate they were actually pretty dang good - up about 4.5% with a 70bp acceleration in the 2-year run-rate. Yes, there was a lot of noise around weather, rebate checks and calendar. But overall, these numbers are not recession-like at face value.

But the bifurcation between sectors is very hairy. Discounters' comps are ramping meaningfully, which is largely due to food inflation, and to a lesser extent, the consumer trading down on discretionary items. But the department stores and apparel retailers were flat-out awful, with nearly every one missing plan.

Here's an interesting stat for you. Apparel comps are down 6 out of 7 months in a row at an average rate of 5.1%. Sounds big, huh? But we also saw negative comps for 16 months straight (March '02 'til June '03) at an average rate of 3.3%, and for the 13 month period ending November 1991 (avg 2.0%). I'd argue that the consumer is in worse shape today, and for the next 2 years, than in either of those periods.

I'm not holding my breath for this to reverse course anytime soon.