Make us your home page
Instagram

It's beginning to look like a half-off holiday

When JCPenney set up the Christmas trim-a-tree department at Tyrone Square Mall two weeks ago, everything was marked half-price from day one.

Spend $50 at Limited, Too and many apparel stores, and they'll hand you a $25 coupon for a return trip in November plus $15 more after Thanksgiving.

Last year Mattress Firm helped prod a third of shoppers to buy big-ticket bedding by extending financing to five years.

"Now more people pay cash or debit card," said Greg Barber, a manager in St. Petersburg. "It's been slow."

Those are just a few telling signs of an upcoming holiday season that more and more retailers fear won't make liftoff. Stores didn't deploy the Christmas decorations any earlier. But, facing a deteriorating economy, they are pulling the trigger early to win sales before it gets worse.

"A lot of stores are running sales to get people to spend now, not wait," said Dawn Richter, marketing manager at Westfield Brandon.

Even before the recent stock market free fall, the credit crisis and tapped-out shoppers gave retailers pause.

The usual holiday inventory build-up was pared back. Shipments from Asia into U.S. ports are down 6.5 percent from a year ago, according to the National Retail Federation Port Tracker. Store holiday hiring projections are well below last year's 698,000 jobs, according to Challenger Gray & Christmas. In August, 41 of 100 retail chains surveyed by BDO Seidman said lenders had already tightened their credit to buy goods.

With consumer spending two-thirds of the economy, that raises doubts about any quick, shopper-led economic recovery.

"We don't see any reason for optimism in the back half of the year, so we're managing our business accordingly," said Glenn Murphy, chief executive of Gap Inc., which also owns Old Navy and Banana Republic.

Then came a seemingly bottomless stock market free fall, presidential candidates talking about economic woes and banks ratcheting credit terms tighter.

Now retailers are canceling orders. Lenders killed deals with many small Asian factories and kept suppliers from helping stores finance inventory as usual.

"The banks turned ultraconservative about revolving credit, so if you don't have asset-backed credit by now, it's all but impossible to get," said Steve Knopik, chief executive of Beall's Inc., a Bradenton retailer with 650 stores. "We're seeing some disruption in the flow of goods."

Last week, September sales results came in weaker than expected, with 74 percent of 20 chains short of their forecasts.

Sales in stores open more than a year are a common barometer of a chain's hold on its customers.

In September, declines crossed all price categories: Target, down 3 percent; Kohl's, down 5.6 percent; Nordstrom, down 10 percent; Saks Fifth Avenue, down 11 percent; Dillard and JCPenney, down 12 percent; and Old Navy, down 24 percent. Costco, BJ's Wholesale and Wal-Mart reported sales gains boosted by necessities like gas and food, but they missed forecasts. Beall's Outlets and the parent of TJMaxx and Marshalls also reported decent gains.

That prompted some analysts to reject an earlier National Retail Federation forecast of a minimal 2.2 percent gain for general merchandise sales for the holidays.

Adjusted for inflation, that would be a decline. Some experts now see a decline as deep as 5 percent and the worst holiday season since the 1991 recession. Without looser credit, they see no recovery until 2011.

"The lack of credit cuts the very lifeblood of retailers," said Burt Flickinger III, a New York retail consultant who tripled his prediction of the number of stores that will close this winter to 1,500. "Retailing has been in recession a year and has two more to go."

Once-prosperous chains are walking on thin ice this holiday season: Circuit City Stores Inc., Talbots and Borders Group.

In stores, the buzzwords this season are necessities and bargains.

"Traffic is down even at discount stores like Target because people fear they will be tempted to buy something trendy," said Wendy Liebmann, president of WSL Strategic Research.

"For this holiday the emphasis of our brand promise — Expect more. Pay Less — will be the "pay less" part," said Kathryn Tesija, executive vice president of merchandise at Target Corp.

Prices will get bigger type in ads. Messages will tout deals.

The aisles at Beall's department stores will be jammed with gifts priced at $9.99, down from $14.99 a year ago. Wal-Mart last week cut prices on 10 top-selling holiday toys to $10.

A sign at the door to Pac-Sun simply says "Sale $4.99." You have to go inside to learn it's for clearance girls tank tops and swimwear.

"The shift is to practical gifts," said Gwen Bennett, Beall's vice president of marketing. "This time, no Billy Bass plaque."

Mark Albright can be reached at albright@sptimes.com or (727) 893-8252.

It's beginning to look like a half-off holiday 10/11/08 [Last modified: Monday, October 13, 2008 1:06pm]
Photo reprints | Article reprints

© 2017 Tampa Bay Times

    

Join the discussion: Click to view comments, add yours

Loading...
  1. Make-A-Wish Foundation aims to help more kids in Tampa Bay

    Health

    The Make-A-Wish Foundation is on the lookout for sick children in the Tampa Bay area who need a once-in-a-lifetime pick-me-up.

    Grace Savage, a 10-year-old girl with a chromosomal disorder made a trek to the Clearwater Marine Aquarium last year, courtesy of the Make-A-Wish Foundation. The foundation intends to beef up its presence in the Tampa Bay area after a reorganization. The region is now the responsibility of the foundation's Southern Florida chapter, one of the most active in the country, with more than 11,000 wishes granted so far. [JIM DAMASKE   |   Times ]
  2. Florida hides details in nursing home reports. Federal agencies don't.

    Medicine

    TALLAHASSEE — Gov. Rick Scott widened his offensive Thursday against the Broward nursing home he blames for the deaths of 10 residents by setting up a tip line for information, but when it comes to access to the inspection reports of all nursing homes, the governor's administration has heavily censored what the …

    In the foreground is a document detailing the findings of a Feb. 2016 inspection at the Rehabilitation Center at Hollywood Hills obtained from a federal agency, the Center for Medicare and Medicaid Services. Behind it is the state?€™s version of the same document, from the Agency for Health Care Administration, showing how it has been redacted before being released to the public. [Miami Herald]
  3. 'Toxic' times: How repeal of Florida's tax on services reverberates, 30 years later

    State Roundup

    TALLAHASSEE — Long before Hurricane Irma attacked Florida, the state faced a troubled fiscal future that the storm will only make worse.

    Robertson says the tax debate is now “toxic.”
  4. Fewer Tampa Bay homeowners are underwater on their mortgages

    Real Estate

    The percentage of Tampa Bay homeowners underwater on their mortgages continues to drop. In the second quarter of this year, 10.2 percent of borrowers had negative equity compared to nearly 15 percent in the same period a year ago, CoreLogic reported Thursday. Nationally, 5.4 percent of all mortgaged homes were …

    The percentage of Tampa Bay homeowners underwater on their mortgages  continues to drop. [Times file photo]
  5. 'What Happened'? Clinton memoir sold 300,000 copies in first week

    Blogs

    Despite being met with decidedly mixed reviews, What Happened, Hillary Clinton's new memoir about the 2016 presidential campaign, sold a whopping 300,000 copies in its first week.

    The new memoir by former presidential candidate Hillary Clinton sold 300,000 copies in its first week.