NEW YORK CITY-A recent Lehman Brothers report on retail softlines noted that the holiday season didn’t get off to a stellar start, with several major chains dragging in terms of sales. But there were a few exceptions: “Sales in November for our softline universe were weaker-than-expected across the board, with the exception of Ross Stores and American Eagle Outfitters,” says the report, which was authored by analyst Jeff Black of the firm’s New York office.

California-based Ross Stores, in Black’s estimation, did well in its November comps by not doing as badly as expected, posting a 2% comparable store sales decrease versus the analyst’s projection for a decline of 3%. “We’re encouraged that things are this good when the environment is this bad,” the report says of Ross, which currently operates 588 stores, mostly in community and strip centers. “Importantly, the near term is improving in terms of product availability. Ross Stores may be able to take advantage of buying opportunities presented from the weakness in November sales.”

As for American Eagle, the report noted that, among other things, selling over Thanksgiving weekend was robust, with comps up in the high 20s over both Friday and Saturday, and that the retailer exhibited broad-based strength across most merchandise categories and all geographic regions. All together, the November comp numbers for the Pennsylvania clothier, which operates more than 1,000 stores in the United States and Canada, came in at 22.7% higher than the previous year, ahead of expectations.

By contrast, November sales were soft for the balance of the stores in Lehman’s softline “universe,” which also includes Abercrombie & Fitch, the Gap, Urban Outfitters, the Children’s Place, Burlington Coat Factory, and TJ Maxx. For example, Abercrombie & Fitch scored a 2% overall increase in comps compared with last November, lower than expectations, but still better than last year’s decrease of 13% in the same month. Black noted that the Ohio-based retailer was led by its Hollister stores, which saw an increase of 13% over last year.

The Gap’s results were also disappointing, with the company’s comp store sales for November decreasing 4%, compared with a 6% increase in November 2003, but the report was nevertheless somewhat optimistic. “The company reported that the adult and baby divisions were performing better than kids, and we think that the domestic chain is finally starting to show signs of stability,” it says.

Looking ahead, the report says that December sales ought to be stronger, but on the other hand, gross margins will weaken as the industry shifts into a more promotional stance. Certainly the Gap is eying accelerated promotions as the holiday season continues. “Although customer response to holiday merchandise in October was initially promising, demand slowed in November,” said Sabrina Simmons, SVP of the retailer. “As customers head into the peak holiday shopping period, we are closely managing our holiday promotions to offer compelling value.”

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