
DATE: Sunday, November 23, 1997             TAG: 9711220275

SECTION: BUSINESS                PAGE: D1   EDITION: FINAL 

SOURCE: BY MIKE ABRAMS, STAFF WRITER 

                                            LENGTH:  148 lines

CASH IS KINGSALES ARE EXPECTED TO BE UP THIS CHRISTMAS AS RISING INCOMES, A ROBUST ECONOMY - AND EL NINO-INFLUENCED WEATHER - PUT SHOPPERS IN THE MOOD TO SPEND SOME GREEN.

Raggedy Ann and Andy dolls flop on each other in one basket. A Thomas the Tank Engine train set sits on tracks in a playful nook. Gund Classic Winnie-the-Poohs keep watch from a lofty perch.

To say Christmas is important to owner Gayle O'Neal is an understatement. At My Doll House - a cozy little store in Virginia Beach's Hilltop district - November and December count for up to 80 percent of O'Neal's annual sales.

But that doesn't mean she's already decked the walls with lights and holly.

O'Neal has survived nearly 12 years in the toy business by stocking up early and dispensing harder-to-find treasures from her store in Virginia Beach's Hilltop district.

Instead of dressing up her shop months ahead of time, she counts on a simple truism: ``People will still do what they can for their children,'' she said. ``For this time of year, I'm in the right business.''

Traditionally as Thanksgiving approaches, retailers like O'Neal and analysts nationwide try to predict the mood of shoppers.

To figure out who will wind up the holiday season in the black, observers evaluate consumer debt, the stock market's autumn gyrations and Mother Nature's intentions.

O'Neal has her own gauge for predicting how the season will go.

``Each year,'' she said, ``has been better.''

Fellow observers are sounding a lot like O'Neal this fall.

They say retail sales will be up on the strength of rising personal income, low unemployment, strong store inventories and high consumer confidence. A robust economy and cool El Nino-influenced weather in October reportedly put shoppers in a buying mood.

That momentum should boost the holiday season's sales 4 percent to 5 percent over last year, predicted Kenneth M. Gassman Jr., a retail analyst with Davenport & Co., a Richmond brokerage.

His colleagues nationally have estimated 3 percent to 5 percent gains.

Among Gassman's predictions:

Brisk clothing, toy and computer sales.

Mostly cash buying.

Relatively sluggish jewelry and home electronics sales, items for which people tend to use credit.

Studies vary as to how much individuals plan to spend on gifts, from about $800 per shopper to as much as $1,400.

``People will spend what they have,'' Gassman said. ``They won't load up on debt.''

Some early November shoppers at Lynnhaven Mall in Virginia Beach said as much.

``I don't use credit,'' said Lori Bruzzesi, a private music teacher. ``I just keep in mind that Christmas is coming, and I try to save.''

Myra Lloyd, a Bolton, N.C., teen-ager, said she works after school at a grocery store to have enough money. While in town last weekend, she began to chip away at the $500 she plans to spend on gifts.

``I'm into the spirit,'' she said, adding that sweaters, socks and shirts top her list.

Many analysts agree clothing will sell well this year, led by velvet, fleece, outerwear and corporate casual styles.

``Apparel has been bigger this year already,'' said Janice McCoart, head of Marymount University's fashion design and merchandising programs. ``The best part of fashion is the range of prices. Looks are copied quickly at every level.''

At Wal-Mart and Target, she said, shoppers can find inexpensive copies of Tommy Hilfiger and Nautica designs.

She said many retailers also capitalize on the ``event'' feel of holiday shopping, making customers feel like they must participate.

Area malls invested thousands of dollars this year in new decorations and encouraged stores to remodel.

Lynnhaven Mall, the region's largest at 1.1 million square feet, features 12 new stores. At Pembroke Mall in Virginia Beach, General Manager James M. Hill said his retailers are excited about new strings of ``old-fashioned'' Christmas lights.

Woolworth's closure in October, which left 30,000 square feet vacant, won't hurt shopper traffic, he said. The mall's first Saturday of Santa photo sales beat the same day last year by 20 percent.

Officials at Chesapeake's Greenbrier Mall are equally excited by 1997 traffic counts, which are up about 7 percent over 1996.

Dillard's Inc. has high hopes for the four Hampton Roads stores it opened in malls earlier this year. The chain doesn't promote big sales events.

``We stick with our game plan,'' said Dick Vasey, a vice president and director of the chain's Virginia stores. ``We pretty much stress our everday value.''

Independent retailers also have fine-tuned their offerings.

Debbie Carr, owner of three Cage women's apparel stores locally, has received national attention for her holiday displays.

Several years ago, an elaborate Eiffel Tower scene won her flagship Cage at the Virginia Beach Oceanfront a six-page spread in the book, ``Great Retail Displays.''

Carr says this year's display, to be unveiled next weekend, covers Asia.

Despite the optimism, some retailers may wind up disappointed.

Few stores and chains will realize the 6 percent and 7 percent annual gains from the early 1990s, analysts say.

An early fall sales slump, attributed to a warm September and Princess Diana's death, is still fresh in some minds. Intense news coverage of Diana's crash left malls emptier than usual.

Among the hardest hit this fall was Ann Taylor, the upscale women's clothier, which reported a 9.2 percent decline in October sales from the year before. The company has two Richmond stores.

Others, such as Sears and J.C. Penney Co., mustered only small gains in October.

The electronics industry could be in a similar situation.

Computer retailers are poised to sell record numbers of machines this season. But with entry-level prices in the $1,000 range, they'll have to sell twice as many to match last year's sales figures. Making matters worse, pocket organizers, cellular phones, pagers and home theater systems aren't the scorchers of Christmases past.

``There's not a lot new out there in consumer electronics,'' Davenport's Gassman said. ``Big-screen TVs, digital surround sound have been out there. There's no novel electronics product in the mass market.''

Experts believe the industry's next big gadget wave - digital video products - is a year away.

Trouble with Iraq and instability in financial markets remain the two biggest question marks, although many analysts say the economy remains strong.

With that in mind, retailers like O'Neal at My Doll House plan to stay positive. It worked for her last year, when she sold five hand-crafted dolls, each at about $1,500, the week before Christmas.

Another way she keeps her customers happy is by focusing on the children. Sometimes, when the little ones find out they have to leave her store empty-handed, they cry.

To calm them, O'Neal hands out stickers.

The key to success this time of year, she said, is to foster the natural cheer already out there.

``Everybody is so happy,'' she said. ``They're so excited to be picking out that special thing. Even the people who are rushed, they are still happy.'' MEMO: The Associated Press contributed to this report. ILLUSTRATION: Color photo

LAWRENCE JACKSON/The Virginian-Pilot

Graphics

SHOPPING DAYS BEFORE CHRISTMAS:

WHAT THE AVERAGE SHOPPER WILL SPEND:

EXPECTED TO TOP TOY WISH LISTS

HOLIDAYS SALES PREDICTIONS:

HOLIDAY SALES AS A PROPORTION OF ANNUAL SALES:

[For complete graphics, please see microfilm] KEYWORDS: CHRISTMAS SHOPPING