Slight Improvement over 1952

The year 1953 produced some improvement but on the whole remarkably little change in the department store business. Sales topped out to a new high, but only by a narrow inc:ement which once more failed to match the rise in consumer disposable income. Improvement in the gross margin was just sufficient to keep ahead of the steadily climbing cost of doing business, and the resulting fractional advance in earnings, though a better performance than that of 1952, still was not enough to break out of the rut. In the meantime accumulating inventories in the middle months tilted the stock-turn rate slightly downward, particularly as the second half of the year ushered in a period of some general business readjustment; and by the end of 1953 department stores were clearly facing the prospect of somewhat lower sales volume in the spring season of 1954.

Enough sales momentum was achieved in the first half of 1953 to offset lagging tendencies in the second half and bring department store dollar sales volume across the finish line at an increase of 1.2% for the year as a whole (for the reporting stores). As was the case in 1952 this was not a sufficient increase to overcome the rising trend of expense, which moved up to 33.8% of sales, the high for the entire period since 1940. Primarily by virtue of a higher initial markon, with markdowns remaining unchanged, the gross mar. gin rate stepped up by 1⁄2 of 1% to 36.3%, the best figure since 1950. Net gain before taxes therefore edged up to 5.2%, and this small fractional improvement carried through to earnings after taxes, 2.6% as against 2.4% in 1952. Thus for the third year in a row, department store final net profits proved unable to break out of the relatively narrow range, 2.3%, 2.4%, 2.6%, figures all notably lower than in any year of the preceding decade. (All these figures, it should be made clear, include the results of branches in the case of stores having such adjuncts.)

Departmentized specialty apparel stores in 1953 were denied even the small improvement achieved by department stores. For the reporting group, sales held even, the small pickup in gross margin was more than nullified by the advance in the expense rate, and earnings before taxes dropped below 1952, with a percent

age rate less than half of that for department stores (Tables 1 and 4).

These 1953 findings are drawn from the reports of 450 companies (primarily U. S. concerns, with a few from Canada) operating a total of 650 stores. These 450 firms comprised 364 department store organizations with total net sales in all departments of $4.2 billion and 86 departmentized specialty apparel stores with sales of $300 million. The aggregate retail sales covered by this analysis thus amounted to approxi mately $4.5 billion, a total which after deduction of Canadian sales is estimated to comprise more than 46% of the 1953 sales of department and specialty women's apparel stores in the U. S. The major ratios and trends summarized above are based on aggregate dollar figures for 324 department store companies and 70 specialty store concerns which provided comparable reports for both 1952 and 1953 (Table 1), and on weighted averages for all department stores participat. ing in these surveys for the years 1939 and 1944-1953 (Table 2). In the following paragraphs there is afforded a more complete summary of 1953 and cur. rent trends drawn not only from these two tables but also from the findings which appear in Charts A and B, in Table 3, presenting common figures by volume groups for department stores, in Tables 5 and 6, setting forth data in terms of cents per sales transaction, and also in some of the tables in Section II, which this year present data on a slightly rearranged basis and (with respect to payroll) in substantially greater detail than formerly.