On Monday, store executives seemed to be hiding behind fears of a grim season in the making, with December’s deep discounting so far doing little to spur gift shopping. Several declined to comment for the record on last weekend’s business, but there was a strong consensus that while shoppers were visible in stores, they remained hesitant to select gifts and more apt to buy for themselves, like Jimmy Choo shoes or other designer goods 60 or 70 percent off.
“The stores were mobbed but I’m not going to say it was good for consumption,” said one New York retail chief executive.
“Why buy early if you think the price is going to continue to come down?” said another department store executive.
Executives are hoping the gifting spirit surfaces at least 10 days before Christmas, when discounting typically crescendos, and that some momentum spills into the week between Christmas and New Year’s, when gift cards get redeemed and clearances mount. But it’s hard to imagine the already sharp discounting further intensifying without giving away the goods.
This year’s Black Friday weekend, which saw better than expected turnout and sales volumes, seems a distant memory as the pace of sales dissipates fast. The International Council of Shopping Centers revised its holiday forecast downward. In mid-October, the prediction was for a 1.7 percent gain, but last Thursday, ICSC predicted November-December holiday sales flat to down 1 percent.
Retailers remain troubled by high inventories, rising unemployment, declining tourism and consumer lethargy, and are reacting strongly. Neiman Marcus tempted big spenders last Thursday through Saturday by awarding triple points for its InCircle rewards program for each purchase. Neiman’s Web site, which has been touting free shipping for weeks, added free gift wrap on Monday, plus a $100 gift card for each $400 purchase through Wednesday.
Bloomingdale’s 59th Street flagship was busy Saturday, with hordes of customers digging into merchandise marked as high as 60 percent off. In the men’s area on the main floor, leather bags, laptop cases and briefcases were 40 percent off, while cashmere scarves, silk ties and leather gloves were 60 percent off. In fine jewelry, a row of about 12 cases — from diamonds and gemstones to pearls — was sitting with 50 percent off signs. When asked if there was any more of a discount, the salesman said he could give another 15 percent off to a Bloomingdale’s card holder. Accounting for all discounts, a $2,200 ring came up $760.
According to a market source, while other stores were lamenting business last week, Bloomingdale’s felt good. “Customers responded to the good values,” said the source.
At Brooks Brothers, “Black Friday was OK. Since then, every day seems to get more and more difficult as we get closer to Christmas,” said Lou Amendola, chief merchandising officer. “There doesn’t seem to be the activity around shopping for gifts. For example, the sweater business and sport shirts are very, very challenging on the men’s side, but the suit business has been less challenging because people, I believe, do not tend to buy suits as a gift. It’s more for themselves. It seems that people are going out, visiting Rockefeller Center, seeing the tree. But you don’t see people with bags and bags of merchandise. I think families are having discussions about really cutting back on gift giving.”
Brooks Bros.’ team meets every day to discuss the week’s strategy, but stays less promotional than other chains. “We are not promoting our basic items. We feel it’s unnecessary,” Amendola said. “It doesn’t make sense to promote a white shirt when you have to get rid of the fashion shirts. We are really promoting merchandise that has seasonality.”