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Sales, sales everywhere
By MARK ALBRIGHT, Times Staff Writer Shoppers returning that ugly sweater from Uncle Elmer on Wednesday were greeted by a chorus of retailers touting deep discounts to unload unsold holiday goods. "The entire holiday season has been one unending clearance sale for shoppers that just intensified," said Kurt Barnard, an Upper Montclair, N.J., economist who publishes a retailing newsletter. To coax bargain hunters out in force, retailers dangled post-Christmas deals well beyond the usual half-price sales on holiday cards and decorations. Burdines was promoting 20 to 60 percent price cuts on goods that already had been marked down. At Lord & Taylor, it was 25 to 40 percent. At Saks Fifth Avenue, it was 40 percent. At Neiman Marcus, it was 60 percent. At The Gap's Old Navy stores, there were reports of shoppers buying T-shirts for as little as $1.99 and heavy coats for $6.99. As retailers worked to move their leftover goods, signs kept piling up that they had suffered their worst holiday performance in at least a decade. TeleCheck Services said sales in stores open more than a year were up a modest 2.2 percent nationally for the 32-day season, compared with last year's 26 days of shopping. In Florida, same-store sales were up 2.8 percent. The sales gain came at the expense of price cuts that dramatically eroded profits. "It's been a dismal season for retailers who had to discount heavily to get the sales they did," said Michael Neimira, who tracks sales of 84 retail chains for Bank of Tokyo-Mitsubishi in New York. While discounters such as Wal-Mart Stores Inc. reported a big finish, department store sales slumped. War, unseasonably warm weather and recession put consumers in a frugal mood. Rising unemployment meant about 1-million Americans traded paychecks for unemployment checks. Many consumers approached the holidays intent on keeping their credit card debt in check. According to a pre-holiday Maritz poll, 41 percent of shoppers planned to avoid borrowing anything for holiday gift-giving and 29 percent planned to have their Christmas bills paid off within a month. "Those are incredibly telling results," said Eric Levy, vice president of financial research for the St. Louis research company. "People are trying to avoid taking on more debt." For retailers, the imperative now is to move the goods left on the shelves. "Merchandise is not like a merlot," Michael Gould, chairman and chief executive of Bloomingdale's, a division of Federated Department Stores, said before Christmas. "It is not going to get better with time." The prospect of deals, and the burden of returns, brought crowds to the malls and discount stores Wednesday. At Countryside Mall in Clearwater, Jim Kaylor guarded a pile of shopping bags and watched his three grandchildren while their mother used clearance sale prices to cash in gift certificates. "She's finding bargains," he said. For Ruby Ayres, 51, of Palm Harbor, exchanging or returning gifts was not part of a shopping day that began at Walgreens at 6:30 a.m. and continued into the afternoon at the Target store in East Lake. "We're on a mission," she said, "to find the best deals." Good news about two retailers caused stock market mini-rallies Wednesday morning. Wal-Mart, the worlds biggest retailer, said it had to discount little to generate a Christmas sales gain in the "upper limits" of 4 to 6 percent. Yahoo Shopping, an Internet conduit for more than 10,000 online shopping sites, said its sales jumped 86 percent between Thanksgiving and Christmas Day. That's 10 times the gain analysts projected for the nascent online retail industry. While Yahoo Inc. stock rose, the company declined to be more specific about what happened. "We don't disclose any dollar figures of our business units," spokeswoman Stephanie Iwamasa said. Shares in Yahoo rose 5 percent to close at $17.51, up 84 cents. Shares in Wal-Mart closed at $58.15, up $1.02.After moving up by more than 133 points during the day, the Dow Jones Industrial Average closed up 52.73 at 10,088.07. Consumer spending accounts for about two-thirds of the economy. Yet analysts, who are waiting for some sign that frugal consumers are loosening the purse strings, were not impressed. "I think it was a (stock market) head fake by investors hoping that we've hit bottom," said Eric Beder, a securities analyst with Ladenburg Thalmann & Co. "You are going to see a whole lot of retailers issue profits warnings before the final sales figures come out in a couple of weeks." Still, analysts foresee no large retail bankruptcies looming. That's because the weakest companies have been reining in their inventories and paying down debt all year. For instance, Kmart Corp., which saw its debt rating downgraded to junk bonds, reported that its holiday sales gain would be at the "low end" of single digits. But the Troy, Mich., discount chain survived the season, when its debt load is at its annual peak, and faces no short-term debt deadlines, said Mary Lou Burde, who follows the company for Standard & Poor's Inc. -- Times staff writer David Gussow contributed to this report, which used information from the New York Times. Mark Albright can be reached at albright@sptimes.com or (727) 893-8252.
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From the Times Business report
From the AP
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