Shoppers across the region finally arrived en masse to stores yesterday and over the holiday weekend, bringing a little bit of much-needed Christmas cheer to area retailers.
Filling malls, strip centers, department and specialty stores across Washington, customers returned -- like the late-in-coming winter winds of December -- and were ready to spend at last.
Retailers will now turn their attention to tallying up whether the holiday weekend's sales boom will translate into profits or if their heavy discounting, combined with consumer disinterest until these final shopping days, has shrunk the bottom line considerably.
Yesterday, there were overloaded shopping bags and traffic jams in mall parking lots. There were usually neat store shelves with merchandise thrown everywhere and lines of exhausted-looking customers at the checkout registers. There were credit checks and some sharp elbows.
"These past few days have gone really well, so I can't complain about a downturn anymore," said Jim Oakley, assistant mall manager at the Fashion Centre at Pentagon City.
Until the weekend, retail sales here and nationwide had been sluggish, according to merchants and customers, due to widespread concerns about the shakiness of the economy and the crisis in the Middle East. In Washington, the depressed real estate situation and a number of high-profile bankruptcies and layoffs also have kept shoppers holding tightly onto their wallets.
And retailers, weary from weeks of price-cutting and promotion designed to entice reluctant shoppers, were getting itchy as the days dwindled toward Christmas. But help seems to have come from the calendar, which gave most people in Washington a long weekend with four consecutive free days to shop before Christmas.
Business at the Pentagon City mall, for example, was slow until mid-December, but began to pick up momentum last week. Oakley estimated that 100,000 people a day came to the mall in recent days and that pre-Christmas sales were up 30 percent over last year.
Most malls in Maryland and Virginia also saw heavy traffic, as parking plazas quickly filled up with customers. At the crowded lots, newly arrived shoppers trailed laden departing ones -- even offering them rides -- for their parking spaces.
Merry-Go-Round Enterprises Inc., the trendy Maryland-based youth apparel chain, reported hefty increases over last year, with sales for the quarter up an estimated 20 percent over last year's $185 million. "It's been a very merry Christmas for Merry-Go-Round," said Michael Sullivan, Merry-Go-Round president and chief executive officer. "The last few days have made it even merrier."
At Le Chateau, a men's and women's apparel store in Lake Forest Mall in Gaithersburg, sales were up 40 percent to 50 percent over the last four days compared with last year.
"It was actually quite a shock," said store manager Ralph Lingis. "But it seemed like if you had what people wanted, you got the sale."
With a little help from discounting, that is. After strong November, sales fell off in December and a lot of merchandise at Le Chateau has been on sale for an average of 20 percent to 40 percent off -- as in many area stores.
Despite the sales surge of the last few days, those discounts are worrisome to retailers.
"Those discounts will erode profits, and sales overall will only go up minimally, since people actually traded down and bought less expensive items at lower prices," said Kurt Barnard, publisher of Barnard's Retail Marketing Report in New York. "That has to show up somewhere and one week will not change it."
Some retailers agree. "The last week has improved our position compared to last year, but sales for December are still running a few percentage points behind. ... That will figure into profits," said J. Michael Wilder, manager of the J.C. Penney Co.'s branch at Lake Forest Mall, where December sales are down about 3 percent from last year. "We expected this, that it would not be too joyful and it hasn't been."
"It was a strong week, but we'll have to work hard to sustain what we have had before," said Alain Chetrit, owner of Hugo Boss stores in Chevy Chase, Georgetown and downtown Washington. "This whole time has been a tense moment in retailing." Chetrit said tighter inventory control and other cost cutting methods will be needed for all retailers, with emphasis on more careful selection of items.
At Olsson's Books and Records, owner John Olsson has benefited from a computerized system that has allowed the store to keep merchandise levels low but stocked properly. "We have been in business a long time and have gotten through difficult times with careful planning, and this was a year that took careful planning," he said. "And it went very well compared to last year, so I have no reason to sing the blues."
Olsson said one reason his stores were prospering was that they sold relatively inexpensive merchandise, giving them an advantage over stores that sell big-ticket items, which are suffering more amid the economy's slowdown.
And as the key date -- Dec. 25 -- passes, another important one is facing retailers immediately: the Jan. 15 United Nations deadline for Saddam Hussein to withdraw from Kuwait.
"A lot of what comes next depends on what happens in the Persian Gulf," said J.C. Penney's Wilder. "Consumers are still nervous and we all could have trouble in January and February, if the situation there does not get resolved."
That could mean bad news for shaky retailers such as R.H. Macy & Co., with its hefty load of debt making its financial stability highly sensitive to decreased sales.
"The disappointing Christmas was not surprising since what was expected came to pass," said newsletter publisher Kurt Barnard, who predicted more difficulty for retailers. " ... It's not over because Christmas is."