Today expected to be best of year for some retailers

Analysts say total sales could be the highest ever for a day after Christmas

December 26, 2003|By NEW YORK TIMES NEWS SERVICE

Shoppers are expected to make today the most lucrative day after Christmas in history, retailers and analysts say. At some stores, such as Saks Fifth Avenue, it is expected to be the biggest day of the year.

Retailers are hoping for good news because this holiday season has been disappointing to many. Although most analysts expect sales at stores overall to be 3 percent to 6 percent higher than last year's dismal holiday numbers, in September retailers were gleefully predicting double-digit growth.

But three snowfalls in the Northeast - along with limits on pre-Christmas bargain sales - did not help the numbers.

And Wal-Mart did not take all the business away, either; its numbers were disappointing, officials said.

The day and the week after Christmas have been gaining in sales over the past two years, with the increased use of gift cards, prepaid plastic gift certificates.

On Wednesday, Scott Krugman, a spokesman for the National Retail Federation, said that the use of gift cards had doubled in the past year. Gift cards now make up $17 billion, about 8 percent, of holiday retail spending, according to federation estimates.

So today "stands a good chance" of being the best Dec. 26, Krugman said, as people begin using the cards. Although gift cards are prepaid, retailers don't record sales until the cards are redeemed.

Besides those redemptions, the day could be especially lucrative for merchants because it is a Friday and few people will be working, analysts said.

"It's like the day after Thanksgiving," said Richard E. Jaffe, a retail analyst with UBS. "It's the right timing."

This year, retailers tried - and in many cases, succeeded - in halting the cutthroat competition that had caused ever-rising discounts in the past five years, starting before Thanksgiving. This season, most analysts agree, the stores offered less merchandise on sale.

Gap, AnnTaylor, Pacific Sunwear and Urban Outfitters were particularly successful with their no-price-slashing strategy. Gap and AnnTaylor are in the midst of turnarounds; before October 2002, Gap reported 29 consecutive months of sales declines in stores open at least a year.

But that strategy means there might be a pent-up desire for bargains among teen-agers and other price-conscious shoppers, analysts and pollsters say. Some people were out scouting shops this week, planning to scoop up their selections when the doors opened this morning.

At Saks Fifth Avenue, the 62-store chain owned by Saks Inc., there will be a first-time event: an 8 a.m. post-Christmas early-bird special.

From 8 until noon, the store will offer all its already-on-sale stock at 40 percent off. After noon, the discount will drop to 30 percent, said Jaqui Lividini, a senior vice president.

While Lividini said she could not make any specific predictions, she said that for Saks and other similarly upscale large chains, Dec. 26 had become the biggest shopping day of the year.

Not for Bloomingdale's.

The Saturday before Christmas - the traditional No. 1 shopping day in the country - was the biggest day for the Bloomingdale's chain, a store spokesman said.

The National Retail Federation is standing firm with its holiday season prediction of a 5.7 percent sales gain over last year. That number encompasses November and all of December. By contrast, some analysts count the holiday season as ending the day before Christmas, and they have lower estimates.

"We realize that as the individual stores put out their results, they're coming in mixed - some are up, and some are down," Krugman said. But on the whole, he said, as Americans returned to luxury stores, the higher-priced goods bumped up the comparisons with last year.

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