By and  on January 7, 2005

NEW YORK — Specialty stores were the stars of the Christmas retail season and appear poised for a bright spring.

Despite several factors that could work against retailers, such as harder sales comparisons and a lack of concrete spring fashion “must-haves,” experts say retailers generally are working off a strong springboard for sales in the new year. Comps, or sales at stores open at least a year, are expected to maintain broad-based strength thanks to the consumer whose spending habits don’t seem to show any signs of abating. Though not all chains were winners, several posted December numbers on Thursday revealing wide swings in  comp-store sales for the better. Executives with the best scorecards attributed the results to higher service levels, sharper editing and sharper store identities and less merchandise sameness. For spring, they’ll largely capitalize on variations of some of the biggest trends that drove the business, such as color, denim, femininity and embellishments, and greater full-price selling.

Same-store sales were stronger than anticipated for many specialty and department store retailers, including American Eagle Outfitters, Chico’s FAS, Neiman Marcus Group, Bebe Stores Inc., Abercrombie & Fitch Co., Dillard’s, Kohl’s Corp., Nordstrom, Federated Department Stores and Saks Fifth Avenue Enterprises.

Despite the strong finish to the year and the good outlook, spring won’t be easy for all chains, considering some are up against strong comparisons and others experienced weaker holiday selling, notably Gap Inc. and Limited Brands, which were only 1 and 2 percent, respectively, ahead in same-store sales. Ann Taylor drooped 1 percent, while Talbots rose 2.8 percent.

In addition, a potentially big impact on retailers in the new year could result if the Federal Reserve Board decides to raise the short-term federal funds interest rate at anything faster than the “measured” pace it has used since mid-2004. The fed funds rate currently sits at 2.25 percent, having been risen gradually five times in 2004 from a 45-year low of 1 percent.

On the other hand, consumer confidence remains buoyant. The Conference Board reported in late December that consumer confidence for the month rose to 102.3 from 92.6 in November, its highest level since July when the reading reached 105.7.

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