Each year without fail, a relative of mine loads up on Best Buy stock just before the holidays. “It’s a sure thing,” he boasts, “because the stock always climbs from the Christmas revenue.”
But even with all the earlier-than-ever Black Friday sales and hubbub this year, including the aforementioned Best Buy issuing tickets for its doorbuster items starting at 3 a.m., holiday sales forecasts for retailers are down. Wal-Mart, Macy’s and JC Penney all adjusted their sales projections downward last week, and the National Retail Federation predicts that holiday sales will grow only 4% for 2007, versus 4.6% in 2006.
Besides general economic issues, reasons cited for the dimmer sales outlook include residual fear among parents regarding the safety of some of the season’s hot toys after a year marred by lead and product design issues. Interestingly, apparel sales are also predicted to suffer because of a lack of major 2007 fashion trends (no must-have items). Because the stock and housing markets have been down, high-end retailers dealing in luxury items are expected to be hit especially hard.
Tim Finley, former CEO of men’s clothing retailer Jos. A Bank, believes that is the holiday season goes as expected, we can anticipate significant consolidation of retailers in 2008.
Black Friday Halo Dims As ’08 Jitters Erupt [CNN Money]
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