Retailers Hope Frivolity Lures Shoppers

The nation's retailers are hoping furry ponchos, fur-lined flip-flops, and sweater sets adorned with multiple broaches will excite shoppers this holiday season and lure them into stores and malls earlier than in previous years.

Some of the merchandise is downright silly, but store owners hope all the frivolity will help them improve on last year's 4 percent increase in sales at stores opened at least a year, which was the biggest gain since 1999 when retailers posted a 5.4 percent increase.

"Many of these trends are not new, but will be hotter because they have a lot more pizzaz," said David Wolfe, creative director for the Doneger Group, a New York-based merchandise buying office. "I don't think this is going be the most tasteful Christmas, but it could be the most fun. And it's selling."

At J.C. Penney Co. Inc. (JCP), hot holiday items include lab-made pink sapphire rings, rabbit fur ponchos and hot pink leather gloves. Wal-Mart Stores Inc. (WMT) is doing well with hot pink puffy suede boots and sweaters with faux fur trims. And after having success with broaches this past fall, Sears, Roebuck and Co. (S) is hoping it will sell even more — it's featuring two or three of these ornate pins on sweaters and capes.

Sears also is doing well with striped ponchos in bright colors, and teen retailer Abercrombie & Fitch Co. is counting on fur-lined flip-flops to give it a sales boost.

At luxury store Bergdorf Goodman, owned by the Neiman-Marcus Group Inc. (NMGA), $1,480 mink handbags with dragon embellishments have been big hits with shoppers, as have $2,200 body-hugging wraps — or what the fashion industry calls shrugs — in faux leopard print, according to Robert Burke, vice president of fashion.

Shares of retailers have outperformed the overall market this year. The UBS discount store index, which includes retailers like Wal-Mart, is up 8 percent and its department store index jumped 19 percent. Both top the Standard & Poor's 500's 6 percent gain.

As the holiday 2004 shopping season kicks into gear Friday amid an improving but still challenging economy, many merchants are trying to be more creative to get consumers to buy in yet another season that hasn't yielded any particular must-haves besides miniature iPods from Apple Computer Inc. and flat-screen television sets.

They're also trying to change consumers' habits about when to start shopping. Sears' pre-Thanksgiving sale, held this past Saturday, offered about three times as many early bird specials than a year ago, according to Bill Masterson, a company spokesman.

On the day after Thanksgiving — known as Black Friday because the surge of shoppers supposedly pushes stores into profitability for the year — some chains are opening their doors anywhere from a half hour to an hour earlier in a bid to get a bigger share of consumers' dollars. Sears, for example, is opening its doors at 6 a.m., instead of 7 a.m., while Penney has a 5:30 a.m. opening, instead of 6 a.m.

Those aren't signs that stores are panicking, according to John Morris, a senior retail analyst at Harris Nesbitt. The discounting levels for the mall-based apparel stores he follows is down 5 percent from a year ago.

The mood of most retailers has improved in recent weeks as falling fuel prices and strong job gains revived consumer spending momentum that slowed in the summer. But many shoppers, particularly those who limited disposable income, are saying they will be cautious.

"I am spending less, trying to be more creative," said Leslie Wolfson, 44, of Hebron, Conn., who was shopping in West Hartford, Conn. She said she intends to spend between $500 and $1,000, less than in the past, given job market worries. "Jobs are hard to come by, family members are unemployed," she said.

Mary Schindler, of Bloomington, Minn., who was shopping at the Mall of America, plans to spend $300 on Christmas gifts this year, about $100 less than last year. She cited high gas prices, higher health care costs and higher property taxes as factors.

"You can only spend what you have, so if you spend it one place, you've got to cut it down someplace else," said Schindler, who always starts her holiday shopping by Nov. 1.

Most consumer surveys on spending indicate that shoppers' intentions are similar to a year ago. The Conference Board (search), a New York-based research firm, said its survey suggests U.S. households will spend an average of $476 on gifts this season, up from $455 a year ago. A separate survey conducted by The Gallup Organization found that shoppers plan to spend $730, down slightly from $734 a year ago.

Still, as Michael P. Niemira, chief economist at the International Council of Shopping Centers, puts it: "The conditions are right for a pretty good Christmas." He predicts same-store sales increases of 3 to 4 percent for the holiday period.

The Washington, D.C.-based National Retail Federation (search) projects that total sales, after restaurant and auto sales are excluded, will increase 4.5 percent for the November-December period. That would be less than the 5.1 percent gain of a year earlier.

Analysts expect that luxury stores will do the best. Discounters are expected to see their gains muted because of the high gasoline prices. Mall-based apparel stores will probably have a mixed bag of results. Teen retailers like American Eagle Outfitters Inc. (AEOS) are expected to do well, fueled by preppy looks, while women's apparel chains such as Talbots Inc. (TLB) could suffer, according to Morris.

With a strong sales streak behind it, Bergdorf Goodman, feels confident that its more lavish offerings will win over customers. "Our consumer is looking for unique product. The more unique and the more special, the more attracted they are," said Burke.

Still, even retailers know that throwing all those broaches, fur trims and other embellishments on the selling floor can confuse consumers, turning them into fashion victims. "You have to be careful, not to add too much or it can be over the top," said Lee Antonio, a Sears spokeswoman.