Hercules May Cost Retailers Upwards Of $245 Million In Lost Sales

Vera Bradley, TJX, and American Eagle will be impacted the most based on their store count in the Northeast and Midwest, Citigroup analysts say.

Winter storm Hercules threw cold snow on retailers’ hopes for a post-Christmas sales boost after a lackluster holiday shopping season.

Shoppers are likely to stay home Thursday through Saturday “given forecasts for major snowfall, high winds, and freezing temps,” which could result in a 1% sales drop for the fiscal fourth quarter, Citigroup analysts Oliver Chen and Nancy Hilliker wrote in a note yesterday. (Retailers’ fourth quarters, typically their biggest of the year, end in January or February to include leftover holiday merchandise and winter items.)

Among specialty retailers, Vera Bradley, TJX, and American Eagle have the highest store concentration in winter storm regions, the analysts wrote. Those retailers, along with Gap, Abercrombie, Aeropostale, Coach, Ross Stores, Limited Brands, and Urban Outfitters — a sampling of the nation’s biggest chains — brought in a total of $24.7 billion in fourth-quarter sales last year, BuzzFeed calculates. While a 1% sales drop might not initially sound like much, that would be just shy of $250 million in total. And that’s just for 10 of the biggest specialty retailers — meaning the actual number across all companies would probably be higher, especially if including department stores and big-box chains.

Last year, shopping between Jan. 3 through Jan. 5 accounted for roughly 3.4% of store traffic during the fourth quarter, the Citi analysts wrote.

On the bright side, jewelry retailers such as Tiffany & Co. and Coach “will not see a substantial negative impact given the storm is not likely to impact Valentine’s Day sales which are traditionally deliberate purchases.”

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