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May Sales Growth Leaders: PacSun, Chico's & Walgreen's

Even Wal-Mart and Kohl's can have a bad month. As retailers report May sales during the next two weeks, the two leaders are expected to fall behind the pack, with below-average comparable store gains of only 1 percent and 1.4 percent, respectively, according to the Thomson First Call Same Store Sales Aggregate consensus estimate. By comparison, niche apparel players Pacific Sunwear and Chico's are expected to outperform with gains as high as 16.9 percent and 9 percent, respectively. The two specialty chains are expected to sustain growth throughout the year, as Chico's expands its successful Pazo spin-off and Pacific Sunwear's d.e.m.o. stores introduce the much-hyped Shady Unlimited product line, designed by Gen-Y icon and rap star Eminem.

Overall specialty apparel sales are expected to rise 1.8 percent., driven by Gap Inc.'s turnaround. The retailer's estimated 6.8 percent increase is the result of better merchandising initiatives, according to Bear Stearns analyst Dana Telsey. Just yesterday, Gap Inc. announced Marka Hansen's promotion to the president position at the company's Banana Republic division. Hansen, a 15-year Gap veteran, most recently served as executive vice president of adult merchandising at the Gap division. She replaces Maureen Chiquit, who left for the top job at Chanel Inc. last month.

Wal-Mart and Kohl's aside, discounters are expected to post the highest gains of any segment, with 2.3 percent growth for May. In the competitive drug store segment, Walgreen's has already posted an 8.1 percent gain in comp store sales, while rival CVS announced a 5.1 percent increase. Longs will announce its results on Friday, and Rite Aid next week. Overall sales for all segments are expected to be up only 1.9 percent for the month.

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