Only three major chains - managed to pull out year-over-year increases for both March and April - Ross, (ROST) TJ Maxx (TJX), and Fred's (FRED). Three other retailers - Aeropostale (ARO), Buckle (BKE), and Walgreen (WAG) fared well in the year-over-year Marpril comparisons, despite their April losses. The Marpril results of Neiman Marcus, Saks (SKS) and Nordstrom (JWN) at first glance seemed to indicate a return to luxury, but their gains this year were on top of spectacular losses in Marpril, 2009, and therefore, not so impressive in the long-term. April wasn't so much a return to luxury as much as it was a slowdown of the mass exodus away from it.
Losses in April same store sales were expected this year since they were being compared to Easter April, 2009. But most retail industry experts seem to have forgotten that last year's Easter sales weren't all that positive. So when Abercrombie, Bon-Ton, Destination Maternity, Stage Stores, Stein Mart, Dillard's, Wet Seal, and JC Penney posted losses this April, they were on top of last year's April losses too. No gains that these eight companies accomplished in March outweighed their year-over-year double losses in April.
So the recovery euphoria in March was largely overoptimistic, if not grossly misleading. Not surprisingly this happens a lot with superficial analysis of short-term measurements.
It's difficult to believe that anyone could be looking at the numbers in the retail industry and not know that recovery is still mostly a result of good press, wishful thinking, and aggressive optimism. And while attitude is a driver in the retail economy, that which is built on a foundation of good press, wishful thinking, and aggressive optimism is ultimately not sustainable. We already built that kind of Ponzi economy and it collapsed. Do we need to do it again?
Those who dare to challenge prevailing optimism about economic recovery have been branded as "economic realists" who are eroding consumer confidence with sober messages that kill the popular recovery buzz. While that's not entirely untrue, realism vs. optimism is not an either-or proposition. We need the balance of both and here's why.
You can turn up the volume on the feel-good music in your car in order to drown out the loud noise your car makes at highway speeds, but that doesn't really make the noise go away and it certainly doesn't fix the engine. You can sing and dance about 290,000 jobs created in April but it won't drown out the thud that thirty million "real" unemployed people make when the music stops and there's nowhere for them to land.
Our economic vehicle is broken. The problem is systemic. It's not an overnight repair job. Quick fix patches no longer work.
So here's how optimism and realism can work well together. While it is overly optimistic to conclude that the new jobs created in April were much more than a temporary census-induced boost, there are still more than a quarter of a million people who got themselves a new paycheck last month and that is a very good thing. Even though there's not enough jobs for the jobless, with each new job created comes the opportunity for an unemployed person to snag it. Even though it doesn't seem like any government entity or singularly brilliant economic mind has a workable solution for sustainable economic recovery, that doesn't prevent anyone's individual recovery.
Numbers are largely an illusion and generally are assigned more power than they really have. They don't preclude anyone's personal bailout. It's realistic to know that 84 people will probably be applying for every retail job that comes open this summer. It's optimistic to believe that you could be the one who's perfect for the position. It's rewarding to give substance to your optimism with realistic strategies that make you stand out from your 83 job-hunting competitors.
Success in the retail industry is still largely a bring-you-own-chair proposition.