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Published: Sunday, 10/28/2001

`Green' Christmas is retailers' hope

BY JON CHAVEZ
BLADE BUSINESS WRITER

With several analysts predicting a sour season sales-wise, some retailers have taken a cautious approach by limiting inventory, holding extra promotions, and tailoring merchandise for quick impulse buying that won't result in piles of large-ticket items left over on Dec. 26.

``It is always a bad thing to have leftover inventory after Christmas,” said Gloria Siegler, head of investor relations for Elder-Beerman Stores Corp., which has two department stores in the Toledo area.

The department store industry, whose sales have been flat throughout much of this year, has been singled out by analysts for particular hard times this Christmas. Discount stores are expected to fare best.

Toni Demoe, a supervisor at Kohl's on Monroe Street, arranges a Christmas display. Toni Demoe, a supervisor at Kohl's on Monroe Street, arranges a Christmas display.
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“But even Wal-Mart will struggle to beat last year's numbers,'' said Britt Beemer, chairman of America's Research Group, a Charleston, S.C.-based market research firm.

He forecasts a grim holiday sales season. Unlike many analysts who predict a sale increase, though small, from last year, he expects a sales drop of 3.5 to 4 percent from a year ago. It is his most pessimistic estimate since 1970, and he said his forecasts have come with a 0.5 percentage point of final sales numbers for the last seven years.

``I tell retailers every day of the year that you want to trade `trash for cash.' That is, you don't want to be stuck with stuff after Christmas, especially this year,'' Mr. Beemer said.

Locally, retailers and analysts agree its hard to estimate Toledo-area sales. Already hit by layoffs in the auto industry, the area this month was slapped with psychological blows from announcements by Dana Corp. of Toledo to eliminate 11,200 jobs worldwide and by General Mills, Inc., that it would close its Toledo cereal-making plant, which employs 460 workers.

``It's fine to do the polling and predictions and certainly there's some validity to it, but until the fat man goes down the chimney, you just don't know,'' said Fred Marx, a retail consultant based in Farmington Hills, Mich.

Felix Jagodinski, left, and Chad Croley, Bowling Green students, compare TVs at the Best Buy on Airport Highway. Felix Jagodinski, left, and Chad Croley, Bowling Green students, compare TVs at the Best Buy on Airport Highway.
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A year ago, holiday sales fell short of expectations, due in part to a nation fixated on a stalled presidential election, he said.

Elder-Beerman's December sales last year were just 1 percent higher than the year before, though November sales had risen 3.6 percent. It is being cautious this season, cutting back on merchandise inventories and trying to tailor them based on customer surveys, Ms. Siegler said.

``We're in a very good inventory position going into Christmas ...,” she said. “We are focusing a lot of our Christmas item business on smaller pickup items.''

The Eddie Bauer store in Toledo's Franklin Park Mall also will keep a tight rein on inventory, said manager Kathy Mermer. But the clothing store also is doubling its marketing, discount coupons, and adding a `preferred customer' sale.

Likewise, The Andersons stores have a new plan after what was nearly a rough season last year.

``Christmas was sluggish until the last week and a half, then we had an unbelievable last week,” said Jim Hinkle, retail director for the Maumee business. ``Up until then, we were sweating it up.''

This season The Andersons ordered more educational toys - like Brio trains and Playmobil - to differentiate it from discounters like Target and Wal-Mart. It also ordered more small power tools to create better impulse purchasing and it has been charting the competition's prices almost daily to respond immediately.

``We think our special tool buys will set us apart from competitors,” Mr. Hinkle said.

He is optimistic about holiday sales, but even the National Retail Federation, which is known for cheery projections, is expecting November and December sales to increase by only 2.5 percent. It is the trade group's lowest forecast since 1990.

The International Council of Shopping Centers predictions are worse. It surveyed 50 retail analysts, and two-thirds who responded before the Sept. 11 terrorist attacks felt holiday sales would run just 2.1 percent above last year. The 14 who responded after Sept. 11 said sales will rise just 0.5 percent.

Still, some retailers and at least one toy manufacturer said they have not noticed shoppers being negative.

Milwaukee-based Kohl's department stores, for example, issued a report last week saying it expected holiday sales in the ``mid single digits'' and that it was prepared to adapt to whatever circumstance arises. The company, which is traditionally tight-lipped about its strategies, is doing its normal seasonal hiring, said spokesman Dave Fantoe.

``I'm pretty convinced that, if the last month is any indication - and we've been up as usual and doing incredible volume - that this will be a good Christmas,'' said Julie Oswald, vice president of the Appliance Center in Maumee.

``We've been doing some giveaways , DVDs with TV purchases, but what we saw last year was some people have started to think of electronics as necessary items,” she said.

``Maybe because people won't be traveling as much, they're thinking of staying home and buying that big screen TV for Christmas. I don't know.”

A national electronics and computer store, Minneapolis-based Best Buy, Inc., has not adjusted its sales plans, and it is cautiously optimistic about this holiday season.

“We'll have our promotions before Thanksgiving and then our holiday promotions, but for us it's business as usual mostly,'' said spokesman Donna Beadle.

At the Mountain Man Ski Shop in Toledo, owner Jim Wenberg said he has not noticed sluggish sales, but concedes people affected by the economy and the Sept. 11 attacks could hinder holiday sales.

``It looks like some people will switch from the family vacation in Aspen and Vail and reroute to driving locations so they can be together but not be exposed so much,” he said. “I have talked to many people who are still going skiing but I ... will be driving up to northern Michigan or to New York.''

As a result, he is carefully watching his inventory and plans to have a special trade-in sale.

Outdoors retailer Gander Mountain doesn't rely heavily on Christmas sales, a spokesman said. Spring and fall, for fishing and hunting seasons, are more vital periods for the chain which has an area store, said spokesman Mike Sidders.

``I think we've been pretty buoyed by how our customers have spent so far,'' he said.

Jerry Kneipp, chief financial officer at Bryan-based Ohio Art Co., makers of Etch A Sketch, the Betty Spaghetty doll, and other toys, said, ``If you talk to the retailers, I think they're all a little nervous,” he said.

“But no one has bailed out on us yet.''

While toy stores have cut their orders at the last minute in the past, hurting manufacturers like Ohio Art, there has been no such surprises so far, Mr. Kneipp said. ``We're still hopeful for a very good year,'' he added.

Mr. Marx, the retail consultant, said the Sept. 11 terrorist attacks might end up countering the pessimism from the economy. Some of it is that people won't be traveling as much and instead will buy things for the home, he explained.

But further, more people than in the past are buying gifts for others ``just because,” he said. A greater appreciation of friends, family, and life seems to have developed from the Sept. 11 attacks, he added.

``We can already see how people are closer in their personal lives,” he said. “How that all concentrates and plays out into the holiday season, we don't know yet.”



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