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Published: Thursday, 10/9/2008

Retailers' sales plunge

The aisles are nearly empty at a Penney's in Pleasanton, Calif. The chain is among mall-based stores that reported weak results for September. The aisles are nearly empty at a Penney's in Pleasanton, Calif. The chain is among mall-based stores that reported weak results for September.

WASHINGTON - If the last few weeks of retail sales are any indication, the holiday season is shaping up to be, in the words of one analyst, a Christmas of movie tickets and board games.

Retailers began reporting September sales yesterday, and most, from off-price to luxury chains, had significant, sometimes double-digit, declines from the same month last year.

The September figures were for sales in stores open at least a year, known as same-store sales, considered a barometer of health.

Wal-Mart Stores Inc., the world's largest retailer, said sales of discretionary items were weak as it posted a 2.4 percent gain in same-store sales, just missing expectations. Target Corp. reported a 3 percent drop, worse than expected, and cut its third-quarter outlook because of increasing defaults on its store credit card.

Warehouse clubs reported gains. Costco Wholesale Inc. posted a 7 percent increase and rival BJ's Wholesale Club posted a rise of 10.4 percent. But both trailed expectations.

J.C. Penney Co. said same-store sales fell 12.4 percent, Dillard's Inc. reported a decrease of 12 percent, and off-price department store Stein Mart said sales plunged 14.8 percent. Sales at Kohl's Corp. decreased 5.5 percent.

Luxury stores reported precipitous drops. Neiman Marcus Group Inc. suffered a 12.9 percent decline and said it expects "customer demand will remain weak for an extended period of time."

Same-store sales fell more than expected at Saks Inc. and Nordstrom Inc. - 10.9 percent and 9.6 percent, respectively - and both cut their forecasts and signaled that economic fears were taking a toll on affluent shoppers.

Sales were soft at specialty retailers. Wet Seal Inc. said same-store sales were down 7.5 percent, American Eagle Outfitters reported a 6 percent drop, and Pacific Sunwear of California Inc. said sales were down 5 percent.

Before the financial meltdown began in the middle of last month, customers had been switching to lower-price brands and stores, cutting back on essentials, and making other changes like mending their clothes instead of buying new ones.

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