alstry (35.68)

Why Same Store Sales Look OK when conditions so BAD...

March 06, 2010 – Comments (1)

Foot Locker Inc. said Thursday that it plans to open about 40 stores and close about 150 underperforming stores this year.

We ended the year with 3,500 owned stores reflecting 38 new stores and 179 closed stores for the year. We also remodeled or relocated 188 stores this year … During 2010, we plan to open approximately 40 new stores, and close approximately 150 underperforming stores as we continue to improve the productivity of our store fleet.

Retail stores are shutting down all over the naton.  Entire malls are closing down and being demolished. 

When reporting same store sales, retailers only address those stores open one year or longer.  Thus, if you shut down your poor performing stores and open new stores, your total sales benefit from those new stores open less than a year while you can create the illusion that same store sales better than actually exist by shuttering the poor performing ones.

The crazy part is you can close a store in one mall and open a new one in the same mall and your shareholders would never know the difference as you keep the illusion going.