Posted on 12/16/2001 1:06:34 PM PST by sarcasm
NEW YORK (AP) -- With less than two weeks left until Christmas, retailers struggling with disappointing sales slashed their prices further, but their efforts might not be enough to help some make their sales goals.
``They're desperately trying to move out merchandise, but they are not doing so successfully,'' Kurt Barnard, president of Barnard's Retail Trend Report, said Sunday. ``This is the home stretch, and they are whipping the horse, but the horse is responding only sluggishly.''
Despite the abundance of bargains, many shoppers -- nervous about job security and political uncertainties -- were reluctant to splurge.
``I am spending less, just buying toys for my friends' children,'' said Judy Boudreau, from Jupiter, Fla., who was at Macy's in New York. ``I have to be more conservative, given what has happened to my investment portfolio.''
Lana Wienberg, shopping in Denver, said her family was forgoing some holiday spending to visit relatives in St. Louis.
``I guess we've re-evaluated,'' Wienberg said. ``We're spending more money on travel and less on gifts.''
For retailers, the disappointments of the season keep growing.
The Thanksgiving shopping weekend, while solid, failed to give merchants the relief they were hoping for. And sales have been limping along since then. Sales at 80 of the nation's regional malls have declined 3.2 percent, from Nov. 23 through Dec. 9, according to the International Council of Shopping Centers. The results, however, don't include sales at department stores and other mall anchors.
Major stores were scheduled to report their weekly results, including sales from this past weekend, on Monday. Overall, the numbers were not expected to be good, although some companies said Sunday they were doing surprisingly well.
Sales at Bloomingdale's were running above expectations this weekend, according to chairman Michael Gould. But at K-B Toys, which operates 1,400 stores, the weekend's sales were up only in the low single digits from a year ago.
``We were hoping for better,'' said spokesman John Reilly, noting that sales of game consoles and game software were strong, but toys sales were unchanged from a year ago.
The Washington, D.C.-based National Retail Federation predicts total holiday retail sales, which excludes restaurant and auto sales, will rise in the range of 2.5 percent to 3 percent, to roughly $206 billion. That would make it the worst retail performance since 1990, when sales were basically unchanged.
Jeff Feiner, a managing director at Lehman Brothers (news/quote), expects sales at the 22 stores he follows will be up 2 percent, the worst since 1991.
``Discounting was rampant this weekend,'' said Feiner, noting that such heavy markdowns will only further erode retailers' profit margins.
Struggling Gap Inc. (news/quote) took even more aggressive markdowns to move out its merchandise, ranging from crocheted scarves that had retailed for $28 and were now $9.99, to lambswool and angora-blended sweaters that had dropped from $78 to $39.99.
At Saks Fifth Avenue's New York flagship there were racks of designer merchandise discounted by as much as 40 percent.
At Macy's New York store, consumers swarmed over piles of discounted handbags and sweaters. For some items that were marked down twice, consumers were able to shave 90 percent off the original price -- a great deal for a shopper, but disastrous for a store's receipts.
``I'm spending less this year because there are a lot more bargains,'' said Laura Manning, from Medford, N.Y., who has almost completed her holiday shopping.
``You're really getting more for your money,'' she said. ``I got sweaters that were 60 percent off for my sons in stores on Long Island. They're giving it away.''
Nancy Hellerstein, shopping in Denver, said the abundance of deals are luring her back to the malls.
``I'm one of these people who tries to do things early and I do, but at the last minute I think, 'That's a really good sale, I'll just go get one more thing,''' she said, while shopping the sale racks at Sears.
While most stores have found that their biggest problem is having too much merchandise, some have run short on certain items, including the hot Harry Potter toys.
As a result, Laura Lindstrom, from Bristol, Conn., regretted not starting her shopping earlier.
``I try to get it done all at once,'' said Lindstrom, who started her holiday shopping on Saturday, and was at the Westfarms Mall, in suburban Hartford, Conn., but ``there's nothing left to buy.''
She added that she tried to get some Harry Potter merchandise for her cousins, as well as Nintendo (news/quote)'s GameBoy Advance, but there were none to be had.
``I was so desperate that I got my uncle a bonsai plant,'' she said.
sarcasm, I kid you not, those cashmere sweaters at Sams were approaching free, and they STILL didn't sell them all.
Course, I would have paid what you did for the pleasure of shopping at Macy's, Saks, etc.. We don't have shopping like that in the "hinterlands". (grins).
sw
They were better than solid, they were good.
However, I think it was the night before Thanksgiving, someone posted a report here on FR that some council was going to report that we were in a recession on the following Monday, regardless of the numbers and in spite of their (the council) being surprised that the indicators of recession being much lower at that point than they predicted.
Sure enough, even after a good weekend, they released their report and it lead the news everywhere, creating a self-fulfilling prophecy... IMO.
Why is it important that we be in a recession?
Who gains?
It won't be long, about the end of feb or first of march. It wont be easy but they will be some good buys. Look to buy about 10 properties at about $100 per mo positive cash flow with 15 year notes, rental rates at about $650 a mo and at the end of 15 years your monthly income will be $6,500.00, not a bad retirement. And your renters will of paid for all of it to boot. :)
BigMack
Most folks are in debt to the max, credit cards, refinanced homes and paid off credit cards and ran them back to the max, the party is over for most and the reality of life has sunk in, their still going and looking but can't buy. Its goina be a long haul for most folks, the american dream (rat race) has done em in. Most of my friends and neighbors work from daylight to dark just to stay a float, most work 2 jobs, what a country. :)
BigMack
Sure would love to hear from some other FReepers about what is going on in their neck of the woods?
sw
Bad for us in the long run, what you have just described is deflation. What ever you have to do, get out of debt if your not already.
BigMack
There higher than at any time in history, and if you remember a while back they changed the bankruptcy laws, to not protect your home and other assets, making it harder to file, they new it was comming back when they did this, the rich get richer and you know the rest. My gut tells me the same as yours does, you can read all the pretty you want to but, what is going on on the real world, it ain't goina be pretty. :(
BigMack
It's a whole different way of shopping in the era, tho. The retailers gave us discounts and sales, and so WE wait, or buy elsewhere. The Department stores and boutiques can't survive in this atmosphere, unless they are deliberate off-price merchants.
In the long term, as more stores close their doors, my fear is, when there is less merchandise to be had, even WalMart will inflate their prices. Hope I'm wrong.
sw
Being a landlord ain't for me, I don't care how much it helps pay off debt.
You got that right sink.
Any advice to someone like me who has played their financial cards very conservatively, but will soon have family members who have been finacially irresponsible coming begging?
I have a brother and two sisters - who have financially sucked my mother and father dry. When they all go bankrupt and lose their house / apartment and don't have a place to live, what do I do when they come calling me / knocking on my door?
Personally, I think you are right on target. We could be wrong.. (but I doubt it), but we are doing the same thing. We have held off from buying a home since our move here from Oklahoma City. In the two years we had been gone. The real estate prices had climbed to ridiculous levels. The house we had sold (which I don't feel was really worth what we sold it for.. though we sold it for what we bought it for after 5 years of owning it) was sold in 1997 for 176,000. The guy is going to list it for 250,000!!! That's approx. a 30 percent increase in only 4 years!! Right?
You sound like you have managed your money wisely. Good for you. I think I would take your advice .. no credit cards..and wait.. then buy up real estate!! It has to happen!! It seems like those in our government just aren't getting to the jist of the problems. It's inflation. And wages just aren't keeping up with it!!
Thanks for your reply. Made a lot of sense.
I just read today in our local paper, and then heard on tv (on Fox News), that retailers are cutting prices like mad right now. So it "could be" your sweater will go down even further. But I assure you, they made "profit" even off that price. Again.. greed!! We are being, and have been duped by a lot of people for a long time.
A correction was desperately needed. Thats what your seeing.. but the financial establishments (Banking, DJ/NASDAQ etc) just aren't getting it either. The markets have been so neurotic. Many of us commenting on all this for a couple years now, saw this coming. When things inflate this fast,..and beyond peoples ability to continue to buy durable goods, housing etc. Something has to give. But to be honest.. it isn't over yet. The worst is yet to come. All the temporary fixes in the world, will not raise wages enough to match the inflation that has been taking place in so many area's. Just MHO
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