(New York; Sept. 9, 2002; PRNewswire) For the remainder of 2002, Standard & Poor's expects that specialty retailers -- regardless of any improvement in the overall economy -- will continue to face pressure on sales and profits as a result of intense competition, market saturation, and limited pricing flexibility. This forecast is revealed by Standard & Poor's specialty retail equity analyst, Karen Sack, in the August 29 Industry Survey on Retailing: Specialty. This report, which covers retailers that sell a single category of merchandise or a few closely related categories, is published by Standard & Poor's, a leading provider of financial research and investment analysis.

According to Sack's report, sales trends in the first five months of 2002 reflect a pattern similar to 2001 where consumers moderated their spending, but nevertheless spent. "Consumer product sectors have benefited from the consumer's willingness to spend, but to varying degrees," notes Standard & Poor's Sack. "The fortunes of specialty retailers have varied by category. While some segments are doing well as a result of strong market conditions and favorable demographics, others have been hurt by overexpansion, competition, and price-cutting."

Reaping some of the "rewards" of consumer spending are furniture, home furnishings, electronics, and appliance stores. These four specialty categories have witnessed a 6.1% year-to-year gain in sales. Sales at building materials, garden equipment, and office supply stores were up more than 5% the first five months of 2002, while bookstores experienced a 6.8% year-to-year gain in sales after seeing some weakness earlier in the year. Specialty clothing and accessories stores saw sales increase 3.0% in the first five months of 2002, held back by a 3.4% drop in sales of men's clothing -- a category that has been weak for the past two years.

Standard & Poor's Sack forecasts that while a strengthening economy will improve the outlook for specialty retailers, results will continue to vary from category to category, and from retailer to retailer within the same category. "Americans' appetite for home-related merchandise should continue unabated," adds Sack. "Sales of merchandise in the home furnishings category, such decorations and bedding, should outpace most other merchandise categories."

Standard & Poor's Industry Surveys series keeps a watchful eye on 51 U.S. industries, offering insights into trends and conditions that affect leading companies' market performance. The Industry Surveys report on Retailing: Specialty looks at the issues affecting the main segments of the specialtyretail industry, including apparel, books, electronics, home furnishings and accessories, home improvement products, office supplies, pet supplies, sporting goods, and toys.

Readers can purchase individual copies of the Standard & Poor's Industry Surveys online at http://sandp.ecnext.com, or can inquire about annual subscriptions to the full Industry Surveys series covering 51 industries by telephone from Standard & Poor's at 800-523-4534, or via e-mail sent to clientsupport@standardandpoors.com.

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