Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: FRIDAY, August 13, 1993                   TAG: 9308130131
SECTION: BUSINESS                    PAGE: A-9   EDITION: METRO 
SOURCE: Associated Press
DATELINE: NEW YORK                                LENGTH: Medium

WITH 130-SOMETHING DAYS TO GO, CHRISTMAS SOOTHSAYERS ARE GLUM

Hallmark tree ornaments are already in the stores and retail industry analysts are making predictions for the holiday shopping season.

So far, analysts seem far from optimistic that store owners will repeat the good fortune they had last Christmas. But at least one thinks retailers will do well.

Of course, with 130-something shopping days till Christmas, anything can happen. But several forecasters say the elements that made last year's season such a success are missing this year, replaced by the kind of fear and uncertainty that dogged consumers in Christmases past.

"Last Christmas was almost artificially strong," said Janet Mangano of Burnham Securities Inc. "There was an ebullience in consumer spending stimulated by the election and people borrowed a lot to fund their spending."

Walter Loeb, a retail analyst and consultant, said that last fall "good times were just around the corner and the administration was going to create more jobs."

This year, he said, those hoped-for improvements remain elusive and Americans are back to worrying, not just about jobs but also about higher taxes and health-care costs.

"The big issue is, of course, growth in personal income," Mangano said. "I think it's going to be pretty hard to come by in the second half of the year."

With companies announcing layoffs and plant closings almost daily, consumer worries about their own job security may further limit shopping sprees.

A poor Christmas will be no surprise to retailers who have already suffered through generally unsatisfactory sales this year. But a down holiday season is particularly worrisome, since that is when retailers make up to 60 percent of their annual profits. Some retailers, including Kmart Corp., have warned after looking at their first-half numbers that full-year earnings would be disappointing.

Moreover, 1993 is bringing its own special problems. Flooding along the Mississippi and other rivers is expected to hurt business in the Midwest, a harsh blow for retailers in the region where sales had generally been strongest during the recession.

Several analysts predict sales gains for the season will be marginal. Mangano and Loeb forecast that industrywide results would rise by low single-digit percentages.

However, a decidedly more upbeat Edward Johnson, of Johnson Redbook Service, predicted sales would grow 6.5 percent to 8.5 percent.

In the meantime, retailers are doing what they can to get consumers interested early. Greeting card stores are already displaying tree ornaments, and the QVC television shopping channel is selling holiday merchandise.