Goodbye, Skinny Jeans; Hello, Holiday Discounts

"They seem to want to start the gift-buying season as soon as possible," GottaDeal.com founder Brad Olson said in an e-mail. "It looks like they are making a 7-8 week push and not putting all their hopes for a profitable quarter on Black Friday alone."

Part of Wal-Mart's woes are also attributable to gas prices, according to senior economist Frank Badillo of Retail Forward, a consulting and market research firm. A company survey showed that more than half of low-income shoppers plan to spend less than they did last year or nothing at all. Discounters and dollar stores showed weak performance last month as a result, he said.

Gas prices are "still putting a crimp on what lower-income shoppers can afford at the stores," Badillo said. Stepping in are department stores, which had been squeezed between low-price big-box stores and more expensive specialty retailers for years. Michael P. Niemira, chief economist with the International Council of Shopping Centers, a trade group, estimated that same-store sales at department stores rose 6.2 percent last month -- outpacing the 3 percent increase in retail sales overall.

Federated Department Stores Inc., which owns Macy's and Bloomingdale's, said yesterday that sales at stores open at least a year were up 7.7 percent last month. However, that figure does not include sales at stores formerly owned by May Co., including the Hecht's chain. Federated chief executive Terry J. Lundgren said sales at those stores "continued to lag."

"There's been a lot of change in the former May Company doors, so the customers are getting accustomed to it," Federated spokesman Jim Sluzewski said.

Saks Inc. reported same-store sales growth last month of 9.2 percent. At J.C. Penney Co., sales were up 8.1 percent. Nordstrom Inc. was up 10.7 percent.

"Department stores are back," said Janet Hoffman, director of North American retail for consulting firm Accenture.

"That's an exciting turn from two years ago."

The sector benefited from a disappointing performance by specialty apparel stores. Niemira estimated that sales there fell by 0.2 percent last month, though individual retailers posted a mixed bag of results. Abercrombie & Fitch Co., for example, suffered a 3 percent decline in sales in stores open at least a year, while rival American Eagle Outfitters Inc. recorded an increase of 8 percent.

Indeed, Wal-Mart is learning firsthand how fickle the apparel industry can be. In the conference with analysts, chief executive H. Lee Scott Jr. hinted that the company would be scaling back its foray into fashion. Out with the skinny jeans, in with the plain white socks. Wal-Mart sold 675 million pairs of white socks in the United States over the past year, Scott said.

"When I walk the store today, the thing I believe is that what we did is that we overloaded the fashion part," he said. "That's not who we are. It's not where the money is going to be made."