EUROPE'S STORES SING YULE BLUES

PARIS--European stores have been decked out in Christmas finery for weeks, but their sales have been lackluster and uneven.
British retailers especially are hurting. An interest-rate increase earlier this month, unusually mild winter weather and a lack of consumer confidence are contributing to what retailers predict could be the worst Christmas season in 30 years.
One of the worst-hit areas has been apparel, and in Britain as in France, pre-Christmas sale signs sprung up as early as a few weeks ago, as retailers discounted coats and knitwear to clear inventories.
The latest survey by the Confederation of British Industry found that almost a quarter of stores cut their prices last month and expect prices overall to be lower this Christmas than last year. Things aren't likely to get any brighter in the New Year: Seventy-four percent of the retailers surveyed said they expected no improvement in the next three months.
In France, the combination of unusually warm and sunny weather, and the fact that people just aren't spending has hurt Christmas and pre-Christmas sales. According to the Economic Observation Center, sales for department and variety stores, adjusted to take into account the season, dropped 2.9 percent and 5.2 percent, respectively, in November.
While "sales" are strictly controlled by the French government, limited to biannual, seasonal periods, "promotions" are not, and stores here have taken to subtle pre-Christmas discounting. For example, this month the Episode boutique on Paris's Rue St. Honoré is offering about $185 (1,000 francs) off every coat in stock until Dec. 26.
At the Galeries Lafayette Paris flagship, sales of apparel, accessories and beauty products were down 8 percent in November. However, they are running a year-to-date increase of 3 percent. Sales at the Printemps Paris flagship were down 2.4 percent in November, while year-to-date sales have been flat. But December has been a brighter month for Galeries, noted a spokesman. "It's been a little colder, and people have been putting off their purchases until the last minute," he noted. "We certainly cannot start talking about a consumer recovery."
The Christmas scene in Italy is mixed, as December sales have been posting some increases compared with last year. This follows a very tough November, due in part to the public crises and numerous strikes that hit the country last month over the preparations of Italy's 1995 Budget Law.
"Until the last week of November, 1994 was the worst year in the history of Standa," explained a spokesman for the chain. .
But Confcommercio, Italy's trade commission, just issued a fairly positive forecast. Sales for women's and men's apparel are expected to increase 1.7 percent and 2.5 percent, when there was a 6 percent overall drop in apparel sales compared with 1992.Perfumes are up 2.5 percent.
The commission observed that Italian retailers lowered prices for the Christmas sales period to stimulate demand.

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