Retailers hoping better sales will be in the bags

Old Saint Nick has become an impatient bloke.

Before the last trick-or-treater had called it a night, shelves at local Walgreens stores were cleared of Halloween candy and costumes and restocked with Christmas decorations and gifts.

The holiday shopping season can’t come soon enough for retailers looking to strengthen sales in recessionary times. Every year, the holiday shopping season seems to start a little earlier. Thanksgiving gets lost in the shuffle.

The National Retail Federation is forecasting $447.1 billion in holiday sales this year, a 2.3 percent increase from last year, which would be a significant improvement from a 0.4 increase and 3.9 percent decrease in the two previous years.

Some 138 million shoppers are expected to swarm stores on Black Friday and over the weekend, so named for the day retailers’ profits go from “red” to “black,” compared with 134 million last year.

Rob Sorum, manager of J.C. Penney at the Galleria at Sunset mall in Henderson, said he’s picking up a “slight sense of optimism” for the first time in three holiday seasons.

“We saw it the last of October and the first two weeks of November,” Sorum said. “We saw them hold back last year, but they’re out spending now. I think everyone was so conservative last year, we held back so long, now we’re going to go out and treat ourselves. It gives us hope for a good holiday.”

An early best-seller is jewelry, which Sorum found a little surprising since it’s usually more of a last-minute purchase. Electronics are hot, especially iPod speakers and dock stations, he said.

Shipping volume has increased 10 percent across the board at Henderson-based Webgistix, a company that fulfills e-commerce orders globally. Chief Executive Officer Joe DiSorbo said he expects to ship about 10,000 orders on Cyber Monday, the day that typically starts the rush for online shopping.

“It’s turned. People weren’t bringing in inventory last year,” DiSorbo said Wednesday as he supervised operations in a 30,000-square-foot warehouse on Wigwam Parkway. “We’re seeing more inventory, a definite uptick. That’s a sign of optimism.”

Retail analysts are still concerned about the high unemployment rate in Las Vegas and how that will affect consumer spending.

Jeff Green of Phoenix-based Jeff Green Partners said it didn’t appear as though consumers were doing as much Christmas shopping in October as retailers had hoped. He thinks estimates of a 3 percent increase in holiday sales are way too high.

“I think it’s going to be flat to slightly up,” he said. “Because until the employment picture looks a little better, not only in your market but nationally, I can’t see retail sales picking up. It’s the same thing in Phoenix.”

People will spend about the same as last year, but the product mix will be different, Green said.

Consumer electronics, toy stores and moderately priced jewelers will have strong sales this holiday season, while luxury items such as home furnishings will be down and all categories of apparel will be flat, he said.

Value is still important to shoppers. Midlevel retailers — those falling between luxury and value — will mostly likely see sales decline, he said.

“That may bode well for Las Vegas,” Green said. “You’re either on the value end of the barbell or the luxury end of the barbell. The luxury end is coming back because the stock market has come back for the last year. They’re starting to buy at Nieman Marcus, Saks and Nordstrom.”

Nevada’s high rate of foreclosures and unemployment doesn’t bode well for consumer spending, Retail Association of Nevada spokesman Bryan Wachter said. His organization doesn’t make projections on holiday sales within the state, relying instead on national reports.

“We can tell you that we’re optimistic that Nevada is going to track the 2.3 percent increase, but we’re wary because we didn’t make the National Retail Federation’s projection for 2009,” he said.

Brian Sozzi of Wall Street Strategies had mixed reactions to the reported 1.6 percent increase in October retail sales. It will go down as a “weird” month, he said.

“It was truly a Dr. Jekyll and Mr. Hyde month,” Sozzi said. “Mean to start the month, somewhat friendlier conclusion.”

Weather was warmer than usual in the first half of the month, which led to a continuation of soft sales from September, he said. A buying binge late in the month is the main reason retailers met or exceeded third-quarter earnings projections.

Heather Valera, marketing director for the Galleria at Sunset mall, said she thinks retailers will see a slight increase in holiday sales over last year, judging by year-to-date numbers and the first couple of weeks of November.

“We focus so much on Black Friday, this one day,” she said. “Years ago it took that one day to put retailers in the black, but what’s really happened the last few years is it’s not about one day, but the entire weekend and in a lot of cases the two weeks leading into it, and then just staying aggressive during the holiday season.”

Valera said the National Retail Federation is typically a little high with their sales projection, but she thinks a 2 percent increase is “doable” and retailers would be happy with that.

“Overall, we’ve seen traffic up and shopper morale has been positive,” Valera said. “I’m a happy marketing director right now. We’re in the best position we’ve been in for the last few years.

Don’t underestimate the power of online shopping, Sozzi said. It’s becoming a great mechanism for retailers to offer exclusive deals and ship internationally. Cyber Monday is catching up with Black Friday as one of the most concentrated holiday sales days.

DiSorbo of Webgistix said online retailers are offering all kinds of discounts and incentives, just like brick-and-mortar stores.

“They’re pushing customers to buy because they know people have their wallets open from Black Friday,” he said.

Webgistix has grown from about a dozen employees when he came here in August 2008 to 34 employees today. He recently leased an additional 24,000 square feet of warehouse space in Henderson and expects to see 50 percent to 80 percent growth next year.

“E-commerce continues to grow and we’re part of that,” he said. “From just a Vegas perspective, this is the kind of thing that helps diversify the economy and takes Las Vegas beyond gaming. We’re enabling local businesses to expand as well.”

Webgistix has about 100 customers, all online retailers, including Las Vegas-based Coffee For Less, Blue Man Group, Holly Madison and Sporting For Less.

Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.

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