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Retail Sales Growth Hits February Snag

NEW YORK -The flagging economy and plummeting consumer confidence took its toll on retail revenue last month, as most specialty and broad-line sellers of brown and white goods reported sharply slower sales growth.

Boosted by several weeks’ worth of revenue from its recent Magnolia Hi-Fi and Musicland acquisitions, Best Buy’s fiscal-fourth-quarter sales rose 26 percent to $5.45 billion, while sales for its fiscal 2001 year ended March 3 rocketed 23 percent to $15.32 billion.

But minus the sales spur of its new subsidiaries, same-store sales rose a more modest 1.8 percent for the quarter and 4.9 percent for the year.

Vice chairman/chief operating officer Brad Anderson said the company is pleased with its performance given the challenging economic climate. “The combination of strong store execution and digital product offerings allowed us to grow market share and achieve our sales goals,” he said, without resorting to “undue promotional activity.”

Anderson noted that “strong sales gains” by such digital products as DVD hardware and software, cameras, camcorders, TVs and cellular phones propelled the category to 15 percent of fourth-quarter sales, compared with 10 percent a year ago. Conversely, he described sales of major appliances and desktop computers as soft, although the chain enjoyed growth in laptops, configure-to-order computers and PDAs.

For the year, majaps dropped from 8 percent to 7 percent of total sales, and home office fell from 35 percent to 34 percent of sales, while CE grew from 30 percent to 33 percent of revenue.

Anderson predicted that sales in the first six months of its fiscal year may be “difficult” due to a continuation of current market conditions.

Meanwhile, RadioShack reported a 7 percent hike in February revenue at its company-owned and dealer/franchise stores to $358.1 million, while same-store sales at company-owned units grew 7 percent for the month on top of last year’s 14 percent growth. Excluding February 2000’s extra leap-year day, comp-store sales were 10 percent, the company said.

Chairman/CEO Len Roberts said sales were led by “strong growth in our computer and audio/video categories,” which enjoyed respective gains of about 20 percent and 15 percent over the prior-year period.

Among broad-line merchants, Sears said sales for the four weeks ended March 3 fell 1.5 percent to $2 billion while same-store sales slid 2 percent. “February proved to be a challenging month, with retail sales falling below our expectations, as the impact of the slowing economy was felt across both our hardlines and softlines business,” said chairman/CEO Alan Lacy. He noted that sales gains in select sectors, including CE, were offset by declines across other categories.

Elsewhere, “excellent sales in appliances,” among other categories, helped fuel February sales for BJ’s Wholesale Club. Total revenue rose 12.3 percent to $340 million for the month, while comparable-store sales grew 6 percent. President/CEO Jack Nugent said demand was “brisk” for majaps but “weak” for computer equipment.

Store sales were softer at Sharper Image, where revenue rose 5 percent to $12.6 million last month, while comp-store sales declined 2 percent. Founder, chairman and CEO Richard Thalheimer attributed the poor comps to bad weather and strong year-ago sales.