PARIS — Bargain hunting is not just an American epidemic these days.

As Europeans enter the holiday shopping season, retailers across the continent harbor mixed expectations, from mildly upbeat in France and Italy to downright dour in Germany. But all agree that price in this dicey global economy is a driving factor for business.

Across the board, merchants recognize that the status quo, wrought with economic uncertainty and tarnished by the specter of an Iraqi war, will not make business easy.

The mood is most morose in Germany,which is teetering on recession. Unemployment is rising and business confidence has plunged. Consumption has contracted in six of the last eight quarters.

Consumers in Italy aren’t in a much better mood. Confidence levels there are the lowest in almost six years.

France and England are faring a dash better. Consumer spending in France climbed 1 percent in October from September and retailers expect recent tax cuts to spur spending.

Yet there might be an upside to it all. Inventory levels, which have contracted steadily since 9/11, are lower than they have been in years. And that could make for fewer markdowns and higher profit margins.

"I’m not positive on consumption, but I’m not negative on retail," said Sagra Maceira de Rosen, a London-based analyst with J.P. Morgan. "Retailers have good inventory positions. They may sell less, but their profits may end up higher."

In the meantime, retailers are doing everything they can to excite their clients. In Germany, C&A said it would accept payment in old marks, hoping to win a share of an estimated $8.78 billion worth of the outdated currency. A spokesman for the fast-fashion chain said payment in the currency accounted for about 10 percent of the weekend’s sales. "We’ve been really surprised with the [initiative’s] success," he added.

And in Paris, Galeries Lafayette and Printemps, both on Boulevard Haussman, have spent lavishly on window displays and impressive light shows.

"In this market, which is very difficult, you have to be more aggressive getting customers in the door," said Jean-Michel Hallez, Galeries’ director. "We’ve spent a good deal more this year on dressing up the store.""If there are no unexpected events that ruin the season, I expect sales to be good in December," said Philippe de Beauvoir, president of tony Le Bon Marché department store.

That said, de Beauvoir isn’t expecting any miracles. He called November a "mediocre" month, even if he expects December to be stronger. "Something always happens leading up to Christmas," he said. "Judging from my past experience, the 10 days before the holiday get people to open up their pocketbooks —even in the most depressed economies. But between the end of this year and the beginning of next year, I don’t foresee a big change in mood. We’ll reduce budgets again next year."

At Galeries Lafayette, Hallez is more cheerful. He said the store expects a double-digit sales increase over last year. He said tourist trade has returned and local clients are shopping, too. "I’m quite optimistic," he said. "We ran a double-digit increase in November and raised our orders for Christmas."

Hallez said luxury accessories were driving sales. "Handbags from Christian Dior, Louis Vuitton and Chanel have produced amazing sales," he said. Other hot items he singled out included Omega and Piaget watches, which have been "selling briskly with the Japanese."

Ready-to-wear sales, on the other hand, have been steady but not stellar. "Women are only buying perennial or investment items," said Hallez. "They don’t want anything that’s going to be obsolete in terms of fashion within a couple of months. They’re more cautious."

De Beauvoir agreed rtw is "a very difficult sell. People don’t want to buy fashion as much in this economic environment."

He said luxury handbags from Dior and Vuitton were doing "extraordinary" business, while watches were difficult. "Luxury items in general continue to sell, but sales of watches have decreased enormously. The only people buying watches are the aficionados. And they’re only buying the newest, most exciting watches."

Printemps president Laurence Danon said she has increased stock for Christmas by about 30 percent because inventory levels have been clean. But she added that the store has been price-conscious for Christmas. "We want to be accessible [in this economic environment]," she said.Apparel sales also seem to be a tough sell in London, too, with the mid-market said to be weaker than young fashion, which has held up well.

British retail consortium figures for the first three weeks of November showed zero sales growth for women’s wear, with analysts blaming the weather for exacerbating the problem. Clothing has been one of the worst departments at John Lewis, with sales up just 2.5 percent for the week ending Nov. 17. By contrast, overall John Lewis department store sales were up 4 percent the same week.

In a bid to drive sales, retailers from Littlewoods to Tesco have cut clothing prices by 20 percent.

Marks & Spencer is believed to be solid, though some prices have been cut and stock levels are high as the group chases sales growth.

In Italy, retailers don’t expect a particularly brilliant holiday shopping season. Shoppers are cost-conscious with their gift buying and, in general, aren’t spending with the reckless abandon of years past, according to merchants.

Giovina Moretti, owner of Milan’s high-end Gio Moretti boutiques, called spending patterns cautious. "People don’t want to waste money," she said. "Gifts are very well thought out."

She said art and photography books and gifts like vases were doing well. She also cited an uptick in evening gowns as women gear up for holiday parties. "It won’t be a brilliant Christmas like in years past, but it won’t be a negative Christmas either," Moretti said.

Rosi Biffi, owner of Milan’s upscale Biffi and Banner shops, said she does not expect record spending this season.

"If it’s a normal Christmas, we’ll be happy," Biffi said. "I’d like [sales] to match last year’s. I don’t think it will surpass that."

Biffi said most people seemed to be trimming their gift-buying budgets in favor of vacation travel. "The mood is to save or to buy practical things," she said.

Germany’s widespread economic malaise and early markdowns are shaping the holiday season.

"Christmas business is only functioning with markdowns, and that’s bad," commented Ula Giers, owner of the three Linette fashion boutiques in Hamburg. "But when [other] major retailers are already offering 50 percent reductions, we all have to follow suit. We can’t sell at full price."Giers said Linette did well this season with leather, knitwear such as cashmere zip-front cardigans, as well as blouses, pants and jeans from Pepe and Seven. Customers are buying small-ticket items, like T-shirts. Meanwhile, the handbag business is going strong. "We had to reorder bags from Céline and Prada," she said.

Calling herself an optimist in a sea of pessimists, Giers said she was making a concerted effort to motivate her staff and her customers. "We sent Christmas cards to our regular customers, offering them a 30 percent price break before markdowns. And we stage events, but the customers are swamped with events. At the moment, it’s not chic to spend a lot of money on clothes. It’s cooler to say I bought this or that at Zara."

To wit, Carl-Henric Enhorning, head of investor relations at Hennes & Mauritz, said the holiday season has started strong for the Swedish fast-fashion retailer. "Value is important for everybody at the moment," he said. "Our early sales indications are very satisfying." Enhorning said the company has clean inventory levels and has not had to resort to price reductions.

Elsewhere in Germany, Elisabeth Kerschbaum, women’s divisional merchandise manager at Engelhorn & Sturm, a Mannheim specialty store, said the mood is bleak, primarily due to the "tense political situation. People are worried about their pensions, costs are going up, and there’s been a wave of layoffs. Quite simply, people have less money in their pockets."

November sales at Munich’s leading designer specialty store, Theresa, "went relatively well. We expect the real Christmas business to approach last year’s figures," said owner Christoph Botschen. "On the whole, smaller items are selling. The customer is pepping up her existing wardrobe with small pieces like shirts, little cashmere sweaters, unusual pants, shoes, etc."

He added: "Consumers are holding on to their money and reducing their expenditures, which is reflected in the popularity of smaller items."

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