Retail Sales Are Down: Blame The Tourists
Just in time for the holiday rush, retailers are dealing with a decline in shoppers from overseas. Multiple marketers, including Macy’s, Ralph Lauren and Tiffany & Co., cited drops in tourist traffic and same-store sales on recent earnings calls. “We’ve attributed the overall [same-store] sales weakness this year to lower foreign tourist spending,” said Mark Aaron, VP-investor relations at Tiffany, on a conference call reporting second-quarter earnings earlier this month. The jeweler, which is in the midst of a rebranding effort designed to modernize its blue-box image for the millennial shopper, posted sales of $959.7 million, a 3% increase over the year-earlier period, though same-store sales fell 2%. Alessandro Bogliolo, a veteran of Bulgari who most recently ran Diesel, starts as chief executive of the luxury chain in October. Declines in tourist spending seemed to catch Macy’s by surprise. In the second quarter, the struggling department store chain reported international tourist sales to be down 9%, a greater drop than in the first quarter of the year. Same-store sales for the period fell 2.5%. “We were surprised by the second quarter and we’re still analyzing whether we think that will continue,” said Karen Hoguet, chief financial officer at Macy’s, on a conference call. “My guess is it very well could.” Macy’s is in the midst of a marketing overhaul, which includes a revamped loyalty program. The chain named BBDO as its creative agency of record last week. Read more at Advertising Age.
