Deep discounts ahead as stores try to salvage season

A shopper carries a Saks Fifth Avenue bag A shopper carries a Saks Fifth Avenue bag in Manhattan. The high-end retailer is cutting prices on some designer clothing up to 60 percent in a last0-ditch effort to boost holiday sales. (June 26, 2012) Photo Credit: Bloomberg

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When it comes to fat holiday discounts, better late than never.

This holiday shopping season, many stores haven't been offering the same blockbuster deals as they did last year. Instead, they've dangled offers of free shipping and no-fee layaways to lure shoppers.

But during the final weekend before Christmas, shoppers should expect to see more "70 percent off" and "buy one, get one free" signs as stores try to salvage a season that so far has been disappointing.

Teen retailer Aeropostale Inc. has slashed prices on everything in its stores by 60 percent. Rival teen chain American Eagle Outfitters is offering 40 percent off all purchases. Saks Fifth Avenue is cutting prices on some designer clothing up to 60 percent. And Children's Place, a children's clothing chain, is offering up to 75 percent off on its website.

The sales are aimed at luring shoppers like Jennifer Romanello, a publicity consultant from Rockville Centre, who is planning to spend $400 less on holiday gifts this season than she spent a year ago. She said she'll be looking for deep discounts when she heads to stores this weekend.

"I just want to be cautious," said Romanello, 47, who has two children, ages 12 and 15. "If it's a great deal, I will consider."

The price slashing may be good news for shoppers, but it hurts stores. Their profits likely will suffer in their last-ditch effort to boost sales during the two-month holiday shopping period, a time when they can make up to 40 percent of their annual revenue.

ShopperTrak, which counts foot traffic and its own proprietary sales numbers from 40,000 retail outlets across the country, said Wednesday that the number of shoppers in stores for the week that ended on Saturday fell 4.4 percent from the year-ago period, while sales declined 4.3 percent. As a result, the company said it would slash its sales forecast to a 2.5 percent increase to $257.7 billion, down from the 3.3 percent growth it had initially predicted.

"It feels like the steam is out of the holiday since Black Friday," said Bill Martin, ShopperTrak's co-founder.

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