BEHIND all the holiday tinsel, fake cotton snow, and colored ribbons left over down at the local shopping mall, there's a lot of hand wringing under way in the front offices of major US retail stores.
Despite exceptions by a few national chains - mainly upscale stores that cater to an affluent clientele - this has been less than a stellar season for retailers. Some consumers, fretting about an economic slowdown in the United States and concerned about possible military conflict in the Gulf, snapped their wallets shut weeks ago. "About the only things we quickly sold out here were the cheaper, middle-to-bottom-of-the-line electronic items," says a section manager at a Sears store in northern New Jersey. "The most expensive products just stayed on the shelf."
Sears, Roebuck & Co. may be one of the few national retailers to have held its own this holiday season. It mounted an aggressive national sales campaign in early December, marked by extensive price-cutting measures and deferral on payment until next year on some costly durables.
Unusually cold weather in the Midwest and the Pacific Northwest also helped to keep customers at home and dampen shopping.
"This is at least the worst retail season in 10 years and maybe even farther back than that," says Janet Mangano, a retail analyst with Jesup, Josephthal Company Inc., an investment house. Her view is shared by others.
"This was certainly the worst retail season we've had since 1982," says Kurt Barnard, who publishes Barnard's Retail Marketing Report, a monthly trade publication. "Most retailers will be fortunate if they can break even with last year."
Sales this year have been running about 3 to 4 percent ahead of last year. But inflation, he notes, will wipe out any gain for many retailers. The consequences for the multibillion-dollar retail industry, says Barnard, "could be very tough for some companies deep in debt. There could be some new consolidations, some (job) layoffs, and some additional bankruptcies."
The retail industry has been hard hit by financial restructuring during the past year or so, a result of extensive overexpansion of stores, leveraged buyouts, and creation of new store chains during the boom years of the mid-to-late 1980s. That rapid growth was partly financed by high-interest junk bonds. Aggressive marketing by mail-order firms has also cut into retail sales.
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