By  on October 16, 2007

In face of bearish Christmas forecasts, The Macerich Co. has developed a contrarian point of view on the holiday season.

A Macerich survey completed by 42 retailers and released exclusively to WWD estimates that total sales will rise an average of 9 percent for the fourth quarter. For the year, the retailers on average expect an 8.8 percent gain. Those forecasts are about twice as high as what some analysts have been suggesting.

"A year and a half ago, there was a real focus on rising oil prices; now it's consumer confidence," said Ken Gillett, senior vice president of property management for the shopping center developer and owner Macerich, based in Santa Monica, Calif. "Even the perception of problems in the economic arena can impact people's confidence and their spending.

"But overall, it appears retailers are optimistic about sales for this holiday season, and quite frankly, it's a different point of view from what we've seen publicized."

The survey was conducted this month and tapped a wide range of retailers, including Burberry, Coach, Godiva, Lacoste, Sephora, Tiffany, Pacific Sunwear, Hot Topic, Anchor Blue, P.F. Chang's, Crate & Barrel, Linens-N-Things, Staples and Chick-fil-A. The survey was conducted by the Behavior Research Center of Phoenix and filled out by senior retail executives.

Among the other findings:

- Sixty-nine percent of the respondents expect 2007 annual sales to increase; 71 percent expect a rise in the fourth quarter.

- Ten percent expect 2007 sales to decline and 5 percent expect fourth-quarter sales to drop.

- Two-thirds of the retailers haven't changed their projections despite the uncertain economic climate.

- For 2007 overall, 31 percent project low-single-digit gains and another 31 percent see high-single-digit gains to 10 percent for the year.

- For the fourth quarter, 24 percent see low-single-digit gains and 45 percent envision high-single-digit to 10 percent gains for the quarter.

- Forty-three percent of the retailers cited falling consumer confidence as the single biggest risk to holiday spending. Twenty-four percent cited the housing slump; 12 percent cited the consumer credit crunch, and another 12 percent said the high cost of fuel was the most serious concern.It also appears that 2008 will be a robust year for expansion, particularly in the U.S., according to the Macerich survey. On average, the retailers are planning 16.6 new stores in the West, 12.5 stores in the East, 14.4 stores in the Midwest, and 12.9 stores abroad. More than three-quarters of those surveyed said the majority of their expansion will occur in the U.S. over the next 10 years; 15 percent indicated Asia would be where most growth will occur, and 7 percent said Europe. Just 2 percent said Latin America, and no one mentioned the Middle East.

Apple received the most nods as the nation's hottest retailer, for being hip and innovative. Canadian yoga-inspired Lululemon got the second-most votes as a hot concept. Gymboree's Crazy 8 concept for affordable children's fashion also scored well, for seizing a niche and good styling. Others cited, but to a lesser degree, were Crewcuts, Blue Tulip, Fresh & Easy, Zumiez and G by Guess.

The survey also asked the retailers to list their priorities to ensure success in a volatile economy. More than half said focusing on areas with strong demographics and consumers insulated from economic change would be the principal strategy. Forty percent cited exclusive merchandise as the top priority, and an ability to change the mix fast was cited by 33 percent. Advertising/marketing was the highest priority for 13 percent of the field; 20 percent cited increased discounting and special promotions, and 18 percent said lower-priced merchandise would work to attract shoppers.

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