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Saturday 11th of October 2008 04:28:31 PM

Economic times are very uncertain and clothing retailers look to each other to see how they are performing financially. When consumers quit spending household money on clothing, it’s a sign that the overall economy is tightening. With the enormous drops in the markets, it becomes difficult for clothing retailers to make financial predictions with any great certainty.

Macy’s has issued a statement updating their forecasts for sales and earnings in 2008. The company did not hesitate to say the weakening economy has made budgeting and projecting more difficult than normal. This is the same problem all clothing retailers face….from the seller of sweaters to high fashion designers. Predicting consumer spending under such unusual economic conditions is a real challenge.

Despite the problems with the economy, Macy’s was able to outperform other retailers who compete on an equal basis. The declines are seen when comparing total sales from one quarter to the next. In the 3rd quarter as of September of 2008, Macy’s store sales declined by 5.8% when compared to earlier months. The downward sales trend is not surprising given the state of economic markets. If the trend continues, it is expected the 6% sales decline will continue.

The good news is that Macy’s is still financially strong with a good cash flow. As retailers are declaring bankruptcy one by one, it’s good to read about a clothing retailer that is maintaining profitability despite tough financial times. The company is doing well by implementing sound financial management tactics include reducing capital expenditures and managing inventories.

Mr. Terry Lundgren is Chairman, President and Chief Executive Officer of Macy’s. He said, “We have a strong and experienced organization that is committed to maximizing performance through the upcoming holiday season, and to continue to implement the My Macy's localization initiative that we believe will position us well in 2009 and beyond."

(c)Image by Przemek Rot, www.sxc.hu/