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Despite national forecasts, local retailers optimistic about season
Linda Sanders sells roasted nuts at the Nut Shack in West Park Plaza.

Despite national forecasts, local retailers optimistic about season

By TOM HOWARD

Of The Gazette Staff

Denice Johnson got a jump on the holiday shopping season this week by picking up a few gifts for family members and employees of her business, NeeCee's, a downtown women's clothing store.

"I'm at Gainan's right now, and I've already been to Marcasa," said Johnson, who could only be reached on her cell phone.

While thousands of shoppers took advantage of 4 a.m. doorbuster specials today, Johnson offers a more laid-back pace at NeeCee's, the store formerly known as Snow Country.

"What we've found for us is that Friday is a fabulous day. People tend to go out to the box stores early in the morning for bargains," Johnson said. "Then they sometimes come downtown to have lunch, and they'll start to browse our store and enjoy themselves at a slower pace."

Johnson said NeeCee's and other downtown retailers provide a relaxing antidote to the hectic pace of malls and box stores.

"We have great gifts, but it's not the same frenzy as when they're trying to get some limited edition item that goes off sale at 9 a.m.," Johnson said.

"Of course, it's a great weekend for us," she said. "We have our parade, and a lot of families come downtown. The husbands might hear about something that their wives saw."

Johnson said the name change (NeeCee was her childhood nickname) has been a surprising success. "We're getting new and younger customers who had lived here for years and discovered us," she said. The former name sometimes confused customers who thought Snow Country sold sporting goods, Johnson said.

The day after Thanksgiving is traditionally a big day for retailing. But some merchants say Black Friday isn't necessarily their best day during the Christmas season. Some point to the period from the final Saturday before Christmas, Dec. 21 this year, through Christmas Eve, as the busiest time of the season.

"We love procrastinators," Johnson said. "We take good care of them."

Tough season forecast

With the nation's economy teetering on recession, retail analysts are predicting a trying holiday shopping season in the wake of economic problems triggered by losses in the stock market, mounting debt and thousands of home foreclosures. Local retailers say they're thankful that, so far, Montana has escaped the worst effects of a slow economy.

When money gets tight, people tend to focus more on entertaining at home rather than going out. Nancy Culbertson, owner of the Copper Colander, a kitchen store at 2440 Grant Road, says the nesting trend could benefit her business.

The kitchen store moved from downtown to the West End retailing area a little more than a year ago. The larger store, plentiful off-street parking and a convenient location near other retailers have helped generate a lot of foot traffic, Culbertson said.

"There has definitely been a slowdown, but last week we started to see people doing more buying," Culbertson said. "We've been fortunate in Montana not to be affected so much by the downturn," she said.

"We're trying to be positive despite all of the doom and gloom," Culbertson said. "The thing that helps us is that we're a locally-owned store and people like to support local business."

Cooking classes and demonstrations have helped bring people in the door, she said.

Culbertson said the Copper Colander relies on a veteran staff, although she brought in a couple of college students to help during the holiday season.

Decking the malls

Seasonal retailers have again popped up at West Park Plaza, where the smell of roasting nuts is as much a tradition as the Christmas tree lot outside.

Dave Sanders, who owns the Nut Shack with his wife, Linda, said the business operates year round, although the Christmas season accounts for a significant portion of the revenues

"We go to all the trade shows and the farmer's market. This is our sixth year here," Sanders said.

Business was slow right before Thanksgiving, but he's hoping for more sales as Christmas approaches.

Jim Downs, owner of the Spoke Shop, said the store set sales records this year, in part because gas prices soared above $4 per gallon last summer. Orders for service and repair work soared as people dusted off bikes, searching for a cheaper way to get around town, Downs said.

While Downs is hoping for decent December sales, the Christmas season isn't a make-or-break month in the bicycle industry. People are naturally more interested in bicycling when the weather is warm, he said.

Logging on to buy

And if fighting the crowds isn't your cup of tea, retail experts say online sales tend to spike on Cyber Monday, which falls three days after Black Friday.

Keith Brugman, manager of the Billings Vann's store, said the Montana-based electronics and appliance retailer was a pioneer in online sales. One advantage of Cyber Monday is that it eases shopping, and you can take your time before you decide on a purchase, he said.

Brugman said he doesn't put much stock into predictions of a slow holiday season.

"As far as traffic goes, we're quite the other way," Brugman said.

Gifts for the home

Searching for a used cash register, or maybe some shelving to go with that set of stemware?

At the Billings Linens 'n Things store, 2821 King Ave. W., not only is the merchandise priced to sell, but so are all of the fixtures, right down to the checkout counter.

Liquidation sales began in October for the nationwide home accessories retailer, which filed for bankruptcy protection last May. Linens 'n Things originally attempted to close underperforming stores and restructure its debt. But the company later threw in the towel because it couldn't find a buyer and losses mounted. More than 300 Linens 'n Things stores, including outlets in Billings and Bozeman, will close for good after the merchandise and fixtures are sold.

Richard L. Kaye, executive vice president of Hilco Merchant Resources, a Chicago-based company that specializes in "strategic store closings," said liquidation sales typically take from six to 12 weeks. He couldn't pinpoint the exact date when the Billings store will be emptied. Another retailer has expressed an interest in the Billings space, but the landlord isn't saying.

"Store closings are typically handled in the same way as any other sale event, with advertising in the local papers, TV, radio and things going in the mail," Kaye said.

When Linens 'n Things decided to liquidate, Hilco bought all of its assets at auction. He then began a going-out-of-business sale, designed "to recover the greatest value for those assets," Kaye said.

When a store is being closed, a liquidator will sometimes stuff the shelves with steeply discounted merchandise trucked in with the hope of scoring quick sales from bargain hunters. Hilco has no intention to follow that practice, which is known as augmentation, Kaye said.

Many states and cities have laws and local ordinances that limit liquidation sales for a specific time period, so that merchants can't advertise a perpetual going out of business sale as a gimmick.

Kaye said Linens 'n Things didn't get into trouble overnight, and neither did other struggling retailers.

"It's not something that has come upon the retail world in the last, 30, 60, 90 days," Kaye said. "We have a lot of retailers that have competitive problems. They're seeing their margins shrinking and they're getting over leveraged."

Retail analyst Britt Beemer of America's Research Group predicts that the 2008 Christmas season could be a rocky one for many retailers. Linens 'n Things is one of nearly 20 retailers that have sought bankruptcy protection this year. ARG reports that many Americans are even scaling back on the purchase of gift cards, fearing that the retailer issuing them may soon go out of business.

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