By AISSATOU SIDIME of The Tampa Tribune Published Nov. 23, 1998 Projections for holiday sales are all over the place, so here's what local companies are stocking to improve the odds.
Every year at this time, retailers peer into their crystal
balls to predict holiday sales.
The exercise is always imprecise, but it's even more uncertain this
year. Traditional indexes are pointing in opposite directions:
* Consumer confidence polls show shoppers took a collective pause
when the stock market plunged in September, and they're skittish about using credit. But unemployment, gas prices and inflation remain low, helping them feel more secure.
* Growth estimates range from 4 percent to a lofty 8 percent -
which would be the biggest increase since 1994. But American Express predicts sales will be flat in Southern states.
In Tampa, consumers will spend a little more than last year but
will avoid big-ticket items usually bought on credit, such as cars, wide-screen televisions, refrigerators and diamonds, predicts Eric Gordon, director of the University of Florida College of Business.
Stock market gyrations shouldn't make a difference, according to
Gordon.
"The thing that will hurt retailers is if a big employer in Tampa
announces big layoffs," he said. "People are very locally minded."
To sell into a cautious marketplace, local and regional retailers
have beefed up on small, lower-priced items and are targeting loyal customers with early mailers and discounts.
At JumboSports, after seven quarters of losses, executives
acknowledge this is the make-or-break quarter for the Tampa-based sporting goods chain.
The company struggled last season with cash flow and inventory
problems. Shoppers couldn't find some basic items.
JumboSports can't pin its hopes for this season on industry
staples, because sales of Nike shoes and exercise products have been depressed all year. So Chief Executive Officer Jack Bush and Chief Operating Officer Bob Floum have decided to do things differently.
First, managers decorated JumboSports" 59 stores in holiday reds
and greens to help get shoppers in a gift-giving mood.
"They had never done that before," Floum said. "I don't know why." Then, in line with surveys showing consumers will buy smaller items
this year, JumboSports installed gift centers at the front of each store last week. They promote 20 new gift items, including NFL merchandise, golf and fishing mugs, T-shirts and NFLopoly - a sport-centered knockoff of the board game
Monopoly.
"We are really taking the approach of thinking about real Christmas
items that our consumers buy," Floum said. "We've also put up special signage that says "Great Gift Idea" and banners for the holiday."
The chain also stocked up on pool and other game tables that
usually sell well at this time of year. It will launch a major advertising campaign to promote markdowns on infomercial-driven golf products that were selling well in August but have slowed recently.
The chain hopes the changes will help it meet its goal of turning a
profit by January.
"We're cautiously optimistic," Floum said.
Chico's just recovered from slumping sales, but its historic
obstacle in attracting shoppers during December hampers future growth.
The Fort Myers-based chain believes its problem is that customers
usually think of it for lighter, more casual women's clothing - and tend to stay away during cooler months.
So new chief merchandiser Pat Murphy added accessories and
successful products, such as a "slinky" dress, in more luxurious fabrics and styles this year.
Chico's ordered lots of chenille and $38 to $48 velvet-finished
scarves. Scarves make quick, easy gift items for time-pressed shoppers.
Since its "slinky" clothing - made from a shimmery, slimming fabric
that needs no ironing - led to a 30 percent increase in sales so far this year,
Chico's added similar blouses, pants and overalls for the holidays.
Murphy expects consumers to buy the separates as gifts that are
less expensive than a dress or as holiday wear for themselves.
To capitalize on the aromatherapy craze and provide choices for
shoppers who don't want apparel, Chico's added its first line of scented bath and body products. The Goddess Collection features lemon and lavender, papaya, vanilla, guava, and patchouli and orange in lotion, body scrub, and shower gel for $12
and candles at $6 to 20.
The specialty retailer also mailed existing customers a coupon for
50 percent off their next purchases.
Beall's is in a quandary already. The Bradenton-based chain's
outlet and department stores have too much winter clothing.
"We're not as bullish as we were this time last year," said Conrad
Szymanski, president of the department store division. "We had a phenomenal August with the sales-tax holiday, but we think a lot of people satisfied their apparel needs then. [And] the most important factor is that we have had a warm fall."
Beall's canceled some sweater and jacket orders and tripled its
stock of khakis and twill pants - the kinds The Gap help to revive with recent commercials.
So "we're not in a panic situation where we are thinking about
drastic markdowns," Szymanski said. "But we need a good cold spell."
On the other hand, Beall's Outlet stores" profits "are right on
target for the fourth quarter," said Paul Galizia, president of the outlet division.
The outlets have taken advantage of troubles in the footwear
industry to boost shoe stocks. They are selling Naturalizer, Keds, Esprit and other brands for an average of $10 a pair.
The outlets also have added cosmetics and toys. Cosmetic lines
found in many drugstores are selling for 20 percent to 50 percent below retail price.
Barbie dolls, action figures, educational software and children's
books priced at an average of $5 "are my fastest-growing division," Galizia said.
"It makes impulse buying easier when parents are in stores with kids who want something, and grandparents are out buying for their grandkids."
Beall's Outlets expect to sell $2.5 million in toys, about 5
percent of the division's 1997 sales, by the end of the holiday season.
Burdines expects to be an exception to a trend hurting midpriced
department stores such as Dillard's, Sears and JCPenney.
Those chains see rival discounters improving quality and shoppers
spending less time in department stores, according to the International Mass Retail Association. The trend frightens department stores because they depend on December sales for $1 of every $5 annually.
But at Burdines, "we're expecting the holidays to exceed plans,"
said Cary Watson, senior vice president.
The 100-year-old, Miami-based chain ordered fewer sweaters and
wools last spring, concerned about overstocking warm-weather goods. Instead, it doubled its early spring 1999 fashions to about 15 percent of apparel in each store.
It also has heavily promoted its "status brands," including Ralph
Lauren, Liz Claiborne and Tommy Hilfiger.
"Tommy opened extension lines in home, intimate apparel, ladies
shoes and juniors that are very strong," Watson said. "We had some softening up in early November. I don't know if it was storm-related, with [Hurricane] Mitch going out and then coming back. But the last four to five days have been stronger than planned."
To hedge its bets, Burdines stocked up on smaller gift items based
on the status brands such as Hilfiger's Tommy Bear.
At BCD Computer Distributors of Tampa, holiday sales could be a
deciding factor in whether the company goes public in a year or so.
Current sales reports look favorable. Best Buy, Circuit City and
Tandy, which owns Radio Shack, reported strength in electronics last month, with sales at stores open at least a year up 5 percent to 12 percent.
Lee Vaccaro, BCD's founder, attributes that to recent drops in
computer prices.
"The market was so saturated with vendors that prices had to come
down," Vaccaro said. "Then consumer spending was sluggish last quarter with the market going down ... so a lot of manufacturers were hurt by buildup of hardware."
Those factors allowed Vaccaro to stock up on cheaper yet more
powerful computers and peripherals. This season, his three-store chain is promoting personal computers priced below $1,000, including machines with Intel's 350 Megahertz processors.
Vaccaro also added scanners and 56K modems that now are less than
$50. Consumers can get 17-inch monitors, larger than the 14-inch standard, for less than $249. A year ago, those products sold for twice the prices.
BCD obtained the inventory in hopes that consumers will rush to get
new computers before Year 2000 problems kick in with their existing PCs.
"We know everybody's going to upgrade," Vaccaro said. "So I'm
expecting it and 1999 to be one of the biggest in computer sales before leveling off in
2000."
About that time, BCD plans an initial public offering of stock to
finance the expansion of its service business, which includes building and maintaining computer networks.
Bond Jewelers of Tampa shows no fear that shoppers will hesitate to
buy expensive jewelry this season. The company won't need loads of customers to break previous sales records.
Bond's first buffer is that the eight-store chain sells very few
products on credit.
"We are mainly a cash store and so get higher-end customers," said
President Marvin Shavlin.
Second, because catalog sales make up 35 percent of the company's
revenues, new holiday catalogs were mailed recently to existing clients to highlight handmade bracelets with moving parts and two-tone (platinum and gold) jewelry.
Inside, customers received coupons for an additional 10 percent off
any item - including marked-down goods.
"We always have a good sale this time of year," said Mikki Coles, a
store manager who has 13 years with Bond.
The chain expects to sell fewer products but of higher quality and
price.
"People are more concerned with quality this season," said Ray
Potesta, operation manager at Bond in Westshore Plaza. "It's not the number of items but the significance of the purchase that's important."
In fact, when other retailers were struggling in September, jewelry
sales "were very, very good," Potesta said.
To a large extent - regardless of what the indexes say - Tampa Bay
area consumers are buying, Shavlin said.
"You look at the construction industry, and it's booming," he said.
"So I'm expecting nothing more than spectacular sales."
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