Go Back   This Blue Marble, a Global Current Events Discussion Forum > Main Floor > Economy > Finance and Investment

Finance and Investment Formerly the Vault, this is our NO POLITICS zone for discussing our money and investments.

Reply
 
Thread Tools Search this Thread Display Modes
Old 11-27-2008, 11:21 AM   #1
BirdGuano
H1N1 Crash Dummy
 
BirdGuano's Avatar
 
Join Date: Aug 2008
Location: The I.O.U. State
Posts: 8,961
Thanks: 0
Thanked 0 Times in 0 Posts
Default Holiday season my already be over for stores

http://biz.yahoo.com/ap/081127/holiday_bust.html

For stores, the holiday season may already be over

Thursday November 27, 4:33 am ET
By Anne D'Innocenzio, AP Retail Writer

With the outlook bleak for stores, is the holiday shopping season over before it began?

NEW YORK (AP) -- The holiday shopping season begins Friday with a blitz of early morning specials. For some merchants, though, it's practically over already.

Piles of jewelry, clothing and electric drills are bypassing store shelves and heading straight to liquidators by the caseload as stores try to save as much cash as they can.



Major department stores and mall-based chains have cut prices up to 70 percent to move out mounds of excess inventory stuck in the pipeline since the financial crisis hit in September and people snapped their wallets shut.

Big moves of merchandise happen every year -- but usually after Christmas. This year stores are desperate to shed inventory even before Thanksgiving.

"The holiday season is over. The reason? It just never got started," said Marshal Cohen, chief industry analyst at NPD Group, a market research firm. "How cheap things are doesn't bode well for holiday success."

The deep price cuts even on luxury brands -- think 40 percent off on $5,000 Chanel suits and 70 percent off on designer shoes at Saks Fifth Avenue and 40 percent off $695 Ralph Lauren leopard-printed pumps at Bloomingdale's -- are only good news for the dwindling pool of consumers who are comfortable enough financially to take advantage of the deals.

Experts say discounts are only going to get even better as stores resort to more extreme measures to clear out unsold items. The value of coats and sweaters drops dramatically as the winter months wear on.

Still, there is some incentive for choosy consumers to buy early: increasingly lean inventories mean that certain colors, sizes and styles may sell out early. For those who are open minded, it's a bargain hunter's dream.

It wasn't supposed to be this bad. Stores, which typically place orders about four to seven months in advance, had cautiously planned their holiday inventories about 15 percent below last year's levels.

But because of the free fall in consumer spending, stores are now stuck with about 15 percent to 20 percent excess holiday inventory,
estimated Burt P. Flickinger, managing director of Strategic Resource Group.

Richard D. Hastings, a consumer strategist with Global Hunter Securities, says the latest culprit -- fear of deflation -- is also causing stores to dump inventory. Clothing and other merchandise is worth less now than it was even three months ago.

"Prices are slipping too fast, and so by the time you sell the product, stores are not covering their operating expenses," he said.

But stores are only making matters worse. The more they discount and send to liquidators, the lower the prices become. Consequently, stores generate less in sales.

Still, in the current economy, they have no choice. Carrying inventory is a big expense, and stores need to preserve cash at a time of tightening credit.

At warehouses operated by Liquidity Services Inc., a leading online auction company for surplus goods, there are rows and rows of pallets of offloaded merchandise ranging from jewelry to consumer electronics.


At the company's Liquidation.com, which auctions surplus goods offered by stores and manufacturers to dollar stores and small businesses that sell on eBay, the number of auctions scheduled for the Thanksgiving weekend has soared to 2,100 -- eight times more than last Thanksgiving, said chief executive Bill Angrick.

In other words, what normally happens after Christmas is taking place this weekend, he said.

"This is about survival. This is not about muddling through the holiday season," Angrick said.

Inventory has doubled from a year ago at Overstock.com, which offers brand-name merchandise at discount prices,
said CEO Patrick Byrne. Stores are unloading top-notch brands such as Gucci and Prada in recent weeks at a rate he's never seen in the company's nine-year history. And more is arriving by the truckload.

"It's like an avalanche,"
Byrne said.

The financial crisis, the meltdown in the stock market and cascading job losses have sent shoppers into full retreat. Even before the holiday season, stores were reporting the biggest drops in sales in decades.

Eileen Klockow, 41, doesn't expect to start her holiday shopping until mid-December, when the post-Thanksgiving rush ends and she can shop in leisure. An accountant from the Milwaukee suburb of Wauwatosa, Klockow said she's not procrastinating, just biding her time for sweeter deals.

"I'm waiting because I think sales will be better later in the month," she said.

How bad will the season ultimately be for stores? Mark Vitner, senior economist at Wachovia Corp., expects total retail sales to fall 0.5 percent for November and December. That would be the first decline in holiday sales since 1982.

In the last few Christmas seasons, analysts have worried about holiday sales making only weak gains. This year sales are expected to contract from a year ago, making this a do or die season for the weakest stores.

Profits are eroding quickly, and there have already been a string of bankruptcy liquidations from Mervyns LLC to Linens 'N Things. Circuit City Stores Inc. filed for bankruptcy protection this month, and analysts expect more to come.

Even for Overstock.com, there's a limit to all those Pradas it can buy.

Byrne noted that his buyers are becoming "gun-shy" as they calculate how much a pair of Prada shoes, for example, will be worth after Christmas if the discounts at stores get even deeper.

"If goods are not sold by Christmas, the value keeps going down," he said.
__________________
--

Quote:
"It is better to have lived one day as a tiger than a thousand years as a sheep." -- Tibetan proverb
News and commentary updates on Twitter @guanosphere
BirdGuano is offline   Reply With Quote
Old 11-27-2008, 10:54 PM   #2
neilyoungfan
Member Level 4
 
Join Date: Aug 2008
Location: Ohio
Posts: 550
Thanks: 0
Thanked 1 Time in 1 Post
It sure doesn't look good for retail this year. From today's CNN quick vote:

Will you hit the stores for post-Thanksgiving sales?

Yes, I'll spend as much as last year 11% Votes: 9,489
Yes, but I'm cutting back 22% Votes: 19,772
No, I'm in "spending lockdown" 68% Votes: 61,043

Total Votes: 90,304
neilyoungfan is offline   Reply With Quote
Old 11-27-2008, 11:39 PM   #3
Key
Member Level 4
 
Key's Avatar
 
Join Date: Aug 2008
Posts: 715
Thanks: 82
Thanked 64 Times in 31 Posts
Over? We'll see.

The local news just showed the long line of people prepared to spend the night in line outside of Best Buy. The first one in line has already been there since early this morning.

Current wind chill temp is 28 degrees F. Seems to me they are planning to do some serious shopping.
Key is offline   Reply With Quote
Old 11-28-2008, 12:10 AM   #4
warren
three dogs, three guitars, three opinions
 
Join Date: Nov 2008
Posts: 73
Thanks: 0
Thanked 0 Times in 0 Posts
I work at Lowe's and we've got some major markdowns on tools (which we do every year at this time). I work in the tool department.

I suspect we'll do just fine. But I'll have to see how it goes tomorrow.

Each department has some outstanding offers.

warren.
__________________
To some G-d calls in a whisper, to others with a shout--depending on how close they are to Him.
Rabbi Nachman of Breslov
warren is offline   Reply With Quote
Old 11-28-2008, 01:00 AM   #5
leistb
Senior Level 6
 
leistb's Avatar
 
Join Date: Sep 2008
Posts: 8,566
Thanks: 336
Thanked 668 Times in 382 Posts
The finer points of this lead article point directly to what Roubini and others have been discussing in the past several weeks with regards to deflation (or stag-deflation as put forth by Roubini).

It's a nasty circle to get into and I understand why it would be more difficult to get out of a deflation cycle as opposed to an inflation cycle. As a business owner it's tempting to raise prices in the very near term in order to provide a buffer for the inevitable price decrease in order to remain competitive.
leistb is offline   Reply With Quote
Old 11-28-2008, 02:06 PM   #6
BirdGuano
H1N1 Crash Dummy
 
BirdGuano's Avatar
 
Join Date: Aug 2008
Location: The I.O.U. State
Posts: 8,961
Thanks: 0
Thanked 0 Times in 0 Posts
Quote:
Originally Posted by Key View Post
Over? We'll see.

The local news just showed the long line of people prepared to spend the night in line outside of Best Buy. The first one in line has already been there since early this morning.

Current wind chill temp is 28 degrees F. Seems to me they are planning to do some serious shopping.
Door busters are loss leaders. They don't contribute a dime to the bottom line of the store's profits, and this year many of those people interviewed are in line JUST for the loss leader and nothing else.
__________________
--

Quote:
"It is better to have lived one day as a tiger than a thousand years as a sheep." -- Tibetan proverb
News and commentary updates on Twitter @guanosphere
BirdGuano is offline   Reply With Quote
Old 11-28-2008, 02:51 PM   #7
Potemkin
Omne ignotum pro magnifico
 
Potemkin's Avatar
 
Join Date: Aug 2008
Posts: 23,698
Blog Entries: 3
Thanks: 74
Thanked 1,807 Times in 1,099 Posts
I think it was the beginning and the end of the Christmas shopping season.

Kamikaze trip for the loss leaders to make the limited Christmas budget stretch and that was it.

If you have spare cash later on, there are going to be some good bargains.

I would also bet "practical" items are going to be popular Christmas gifts this year.

Nice coats, boots, gloves, hats, underwear, socks etc.

Lastly, I think right after Christmas they are going to start blowing out nice coats and accessories early.
__________________
When surfing online remember Sturgeon's Law: "90% of everything is cr@p."

© Gregori Potemkin. All rights reserved. But wait . . . fair use allowed and encouraged. Actually, go 'head and publish the whole thing as is. I don't care.
Potemkin is offline   Reply With Quote
Old 11-28-2008, 04:39 PM   #8
Brooks
Member Level 2
 
Join Date: Aug 2008
Posts: 325
Thanks: 0
Thanked 0 Times in 0 Posts
What about those of us who finished our shopping before Thanksgiving? The only reason I have more to buy is we are filling a couple of wishlists through charities at work and I didn't have the lists earlier.
Brooks is offline   Reply With Quote
Old 11-28-2008, 04:44 PM   #9
Glenn 50
Member Level 5
 
Join Date: Aug 2008
Posts: 950
Thanks: 0
Thanked 0 Times in 0 Posts
Went into our Walmart lookalike and didn't leave until we had bought ALL the Xmas presents last week. Now we can relax. Everyone knows there is a monetary limit that cannot be stepped over.
Glenn 50 is offline   Reply With Quote
Old 11-28-2008, 04:49 PM   #10
Ought Six
Dismember
 
Ought Six's Avatar
 
Join Date: Oct 2008
Posts: 35,164
Blog Entries: 15
Thanks: 178
Thanked 390 Times in 326 Posts
Arrow

Local news video from their new helo showed that the parking lot of South Center Mall in the Seattle area (where there was a fatal shooting this week) was completely full today. The place is packed.
__________________
* I have the right to live, thus I have the right to defend my life from attackers who would take it from me.
* I have the right to my private property, thus I have the right to defend my property from thieves who would take it from me.
* I have the right to self-determination, thus I have the right to defend my liberty from tyrants who would take it from me.
* The only usable tools for these tasks are guns, and thus I have the right to shoot anyone who would take my guns from me.
Ought Six is offline   Reply With Quote
Old 11-28-2008, 05:29 PM   #11
Twoolf
Searcher for Truth and a good Carpachio
 
Twoolf's Avatar
 
Join Date: Nov 2008
Location: West Central Florida
Posts: 4,594
Thanks: 794
Thanked 651 Times in 426 Posts
My teenage son is working at a Retail Electronics store, and they got slammed today, and not just sale items. The doom and gloomers may have been a "little" too pessimistic
Twoolf is offline   Reply With Quote
Old 11-28-2008, 05:51 PM   #12
BirdGuano
H1N1 Crash Dummy
 
BirdGuano's Avatar
 
Join Date: Aug 2008
Location: The I.O.U. State
Posts: 8,961
Thanks: 0
Thanked 0 Times in 0 Posts
Quote:
Originally Posted by Twoolf View Post
My teenage son is working at a Retail Electronics store, and they got slammed today, and not just sale items. The doom and gloomers may have been a "little" too pessimistic
Mastercard and the check approval company reports are tomorrow.

We'll see what the numbers really are for opening day.
__________________
--

Quote:
"It is better to have lived one day as a tiger than a thousand years as a sheep." -- Tibetan proverb
News and commentary updates on Twitter @guanosphere
BirdGuano is offline   Reply With Quote
Old 11-28-2008, 06:04 PM   #13
Johnny
The Big Cat
 
Johnny's Avatar
 
Join Date: Sep 2008
Location: FEMA region IV
Posts: 908
Thanks: 0
Thanked 1 Time in 1 Post
The malls were packed here today as well.
Johnny is offline   Reply With Quote
Old 11-29-2008, 12:10 AM   #14
rb.
Hey, USA, you're not the boss of me!
 
Join Date: Aug 2008
Posts: 10,768
Thanks: 707
Thanked 801 Times in 522 Posts
Holiday season over for stores? Hell, as usual, I haven't even begun to think about buying anything yet.
rb. is offline   Reply With Quote
Old 11-29-2008, 12:52 AM   #15
leistb
Senior Level 6
 
leistb's Avatar
 
Join Date: Sep 2008
Posts: 8,566
Thanks: 336
Thanked 668 Times in 382 Posts
Ventured into the malls today just to see what prices were like. Some good deals here and there but nothing spectacular. Parking lots were full but didn't see people leaving with their arms full of toys for girls and boys.
leistb is offline   Reply With Quote
Old 11-29-2008, 02:18 PM   #16
BirdGuano
H1N1 Crash Dummy
 
BirdGuano's Avatar
 
Join Date: Aug 2008
Location: The I.O.U. State
Posts: 8,961
Thanks: 0
Thanked 0 Times in 0 Posts
Back in black

By Joshua Melvin
http://www.mercurynews.com/business/ci_11099910
DAILY News staff writer
Posted: 11/28/2008 11:17:43 PM PST

For local merchants, Black Friday's sales turned out better than expected, though no final numbers will be available until the end of the weekend.


Area residents mobbed Hillsdale and Stanford shopping centers on one of the biggest shopping days of the year. By 5 a.m. nearly 150 people awaited the opening of the Macy's department store at Hillsdale.

"It's not pretty out here," said San Mateo resident Tom Gretsch, just moments before the doors opened. "I'm going to get one item and get out of here."

Representatives from both malls said the number of shoppers was up from last year. Hillsdale saw as much as a 40 percent increase in foot traffic, said marketing director Christine Kupczak, while Stanford had an up to 15 percent hike, said Julie Kelly, head of marketing.

About 128 million people are estimated to hit the stores this weekend, according to figures released by the National Retail Federation. The projection is down by 7 million from last year, but may be proven wrong by the heavy turnout thus far.

Yet the potential of more people in the stores does not necessarily translate into healthier receipts. Many shoppers at both malls were bag-less. Jane Young of San Mateo, who was waiting for her daughter outside of a Stanford store, said a lot of people were just browsing.

"People want to be out and have fun," she said. "But they are watching their budget. They're being cautious."

At least one store was reaping the
benefits of more people passing through. The Lego store at Hillsdale was on pace to make $30,000 in sales on Friday afternoon, a sales associate said. An average day's take is around $6,000. Managers of other stores didn't offer specifics, but all reported they were making a lot of sales. If these returns hold for other area retailers, the deep discounts they offered this year and extended sales hours may have had the intended effect of enticing nervous consumers.

"Everything is about price this year," said Ellen Davis from the National Retail Federation. She added that stores are going after shoppers this year knowing that people may spend less because of a fluctuating stock market and job cuts. Many shoppers out on Friday reported feeling the tighter economy, with some added that they had put off purchases in anticipation of Black Friday deals.

"Anything you can do to save money nowadays, is a good thing," said Joel Bautista of Daly City.

And some of the prices were remarkably lower. Glen, a Los Altos resident that did not give his last name, said sale prices were more tempting this year. While finishing up the purchase of a 52-inch LCD TV and surround sound system at a Sony electronics store in Stanford, Glen said he had been waiting for Black Friday to make a purchase.

"I'll probably save $1,000," he said.

Willis Niffenegger, manager of the Sony store at Stanford, said prices were not necessarily lower than previous years. Rather, he said, the sale was extended to nearly everything in the shop, instead of just certain items in previous Black Fridays.

But shopping on this Black Friday was less about getting a good deal and more about keeping with tradition. Steve Williams from Sunnyvale said his family turns out for the Friday sales every year. Williams, who sat reading a newspaper at Stanford with his dog at his feet, said he was engaged in a tradition of his own.

"I'm waiting for my wife," he said.
__________________
--

Quote:
"It is better to have lived one day as a tiger than a thousand years as a sheep." -- Tibetan proverb
News and commentary updates on Twitter @guanosphere
BirdGuano is offline   Reply With Quote
Old 11-29-2008, 10:49 PM   #17
warren
three dogs, three guitars, three opinions
 
Join Date: Nov 2008
Posts: 73
Thanks: 0
Thanked 0 Times in 0 Posts
Update here:

Our Lowe's store beat the day's budget by more than fifty percent. That's good.

Very busy again today also. And folks are not just buying the advertised on-sale items. They are also buying bigticket items like appliances and expensive tools.

If that's any indication of the season, there's not a worry.

warren.
__________________
To some G-d calls in a whisper, to others with a shout--depending on how close they are to Him.
Rabbi Nachman of Breslov
warren is offline   Reply With Quote
Reply

Tags
holiday, season, stores

Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off

Forum Jump


All times are GMT -4. The time now is 05:37 PM.


Powered by vBulletin®
Copyright © Jelsoft Enterprises Ltd.