As Clothing Jumps Off Racks Retailers See Happy Holiday

Parents beware. If your children have put dalmatians (as in 101), Nintendo 64, and velour disco duds on their Christmas wish lists, be prepared for the rush.

Prediction is a tricky business, but store retailers are expecting a hefty 5 percent rise in sales over last holiday season - better than last year's 3.2 percent increase. The holidays are a crucial time for retailers, since many stores generate more than 60 percent of their annual sales in the final two months of the year.

What's raising expectations is a combination of low inflation, improved job security, rising wages, and a public fairly confident about the nation's financial outlook.

"This year, the economic factors that favor both retailers and consumers are in near cosmic alignment," says Tracy Mullin, president of the National Retail Federation in Washington. "And it all spells good news for retailers and consumers."

The average consumer plans to spend $764 on holiday gifts this year, about $80 more than last year, according to an annual survey by the National Retail Federation in Washington. If consumers follow through, it could be the biggest holiday splurge in the past four years.

Leading the charge are women shoppers, who anticipate shelling out about 20 percent more this year than last - a good omen, analysts agree, since women do most of the shopping.

While big-screen TVs and breadmakers will still be hot sellers, computers and home electronics - which have done well over the past two years - will likely fall off.

"Those who want computers already have them," says Joseph Ronning, a retail analyst at Brown Brothers Harriman in New York.

Rebound for clothing

Making a comeback this season is apparel. Consumers have held off buying clothes for so long that they need to replace their threadbare duds.

Topping Melissa Perrelli's wish list this year is a new coat. "The one I have is kind of old," she says, combing through the selection at Boston's Lord & Taylor.

For women, demand is strong for everything from sweat suits and dresses to the Brady Bunch-style, disco attire of the 1970s, like velour. "There's finally some fashion out there that the majority of women are attracted to," says Cynthia Cohen Turk, president of Marketplace 2000, a New York retail strategy firm.

The clothing boom is also spurring a desire for jewelry. Besides a new car, Ivylee Martinez of Brighton, Mass., wouldn't mind some jewelry in her stocking. "I like diamonds - I don't have a lot of them," she chimes.

For toy retailers, Christmas is the favorite time of year, accounting for more than 60 percent of sales. This year, Barbie continues to flirt at the top of the list. Also, the September arrival of Nintendo 64, which retails for about $200, is already selling out. Toys R Us says it can't keep the video game on its shelves. Hollywood will also be getting a piece of action, with paraphernalia from movies such as "Space Jam," starring Michael Jordan, and Walt Disney's live-action "101 Dalmatians."

"I'm sure there'll be dalmatian everything," says Diane Cardinali of Toy Manufacturers of America in New York.

The department stores, as well as discounters like T.J. Max and Wal-Mart, will likely benefit from strong clothing sales. Specialty retailers have had a harder go of it, but Mr. Ronning expects stores such as The Limited and Talbots to get a lift from apparel sales.

Sears, Roebuck & Co. should do particularly well, analysts agree. "We expect our sales increases will exceed the industry," says Sears spokeswoman Vaneta Rogers. The nation's second-largest retailer is pushing its line of "pleather" jackets and vests made from recycled plastic - the latest craze in synthetic clothing.

Luxury retailers and department stores like Gucci, Tiffany's, and Neiman Marcus can count on a good season, as upscale shoppers continue to ride the cresting stock market, analysts say.

Catalog firms hopeful

Catalog companies, which were hit with high paper and postage costs last year - are also anticipating a better Christmas. Lands' End, the catalog company in Dodgeville, Wis., is looking toward a good season, says Anna Schryver. Its big sellers: cashmere sweaters and scarves, and Polartec jackets.

Even though the official Christmas shopping season, which begins the day after Thanksgiving, is five days shorter this year, analysts don't expect consumers to leave anyone off their shopping lists.

As always, however, many will wait until the last minute to hit the stores. Although inventories are lower this year, many anxious retailers may start marking down prices. "It's become a game of chicken," Ronning says, "between the customers and the retailers."