By and  on November 21, 2007

Retailers in the West are banking on merchandise that provides good value to lift the bottom line this holiday season.

Merchants in Los Angeles, San Francisco, Denver, Las Vegas and Scottsdale, Ariz., like others across the U.S., said they expanded their price ranges and tested promotions to deal with difficult macroeconomic forces, including tight credit, the housing slump, weaker consumer confidence and high fuel costs.

In Los Angeles County, a bellwether for the region, the median home price sank 3.7 percent to $525,000 in October compared with the same month a year ago; gasoline climbed to $3.36 on Monday from $2.45 last year, and the jobless rate hit 5.6 percent, up from 4.8 percent in 2006.

"We expect it to be a little more challenging than in past holidays, but there are opportunities for us to do well," said James Shimizu, chief marketing officer of Ontario, Calif.-based Anchor Blue, a specialty mall retailer with about 200 stores. He declined to forecast revenues for the season.

Shimizu indicated that shoppers seeking affordable gifts could end up at Anchor Blue, where denim sells for far less than it does at designer stores. "In recent years, we have had more of a high-low phenomena, and maybe that high will not play out as much this year," he said, pointing to skinny-leg jeans and fake fur hoodies as key holiday items. Anchor Blue is touting its value proposition with a Black Friday promotion offering jeans at $19.99.

Jaye Hersh, owner of the Los Angeles shop Intuition, agreed that the most expensive goods may have trouble finding takers. She's primarily stuck to under a $300 price point. "Up to $200 or $250, nobody is giving a thought to it," Hersh said. "When it gets over that, I don't want them to hem and haw."

She is still looking for a 30 percent boost in volume, partly because she is adjusting the store's selection for leaner times, avoiding the trendiest items and relying more on accessories and impulse gift merchandise. Marley rings from $20 to $85 and a $10 clear bag reading "Plane to See" have been popular at Intuition.

With the Writers Guild of America strike in its third week in what is a company town, "it is too early to see a trickle-down effect, but people are really watching what they are spending their money on," Hersh said.

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