Hoping for holiday crowds

If you’ve got the bucks to spend this year, you’re going to love the holiday shopping season because there will be plenty of sales.

Chances are, though, it’ll be a miserable time for most, especially the retailers.

That’s what the experts are forecasting as the world navigates the choppy waters of an economic downturn, and shoppers and business owners gird for Black Friday, traditionally one of the year’s busiest shopping days. They call it Black Friday because it’s the day retailers expect the red ink to start turning black.

“It’s going to be an interesting Black Friday because the stores are already pushing discounts for the holiday season,” said Jack Kyser, senior vice president and chief economist for the L.A. County Economic Development Corp. Usually store owners wait until the shopping season ends to cut prices.

As usual, the shoppers will probably line up before dawn to get first crack at the deeper sales, Kyser said. “But the question is after Black Friday — will they keep coming back to the mall?”

About the only retailer expected to come out ahead this season is discount department store Wal-Mart.

South Coast Plaza is expecting large crowds despite the tough economy, the center’s spokeswoman, Debra Gunn Downing, said.

“We’re cautiously optimistic,” she said. “While acknowledging it is a difficult retail environment right now, there is every indication that customers are still going to do their holiday shopping this year.”

Still, she said, shoppers would be driven by the search for deals this year.

“Certainly business will be driven by customer response to discounting at stores,” she said. “There’s a lot of promotional activity out there. It’s really a buyer’s market.”

South Coast Plaza and Fashion Island will weather the storm better than most because the malls attract a wealthier clientele and feature niche stores, Kyser said.

“A lot of the smaller and less glitzy malls will struggle,” he added.

And “aspirational luxury stores” like Coach could “have a tough go of it,” because they cater to shoppers who can’t afford high-end products like Louis Vuitton, Kyser said.

But even the ritziest stores will see a pull-back because, “You even have some people with a lot of disposable income holding back as some of their portfolios have taken a significant hit,” Kyser said.

Typically around this time of year, shopping malls feature what they call “outlook panels” that forecast holiday shopping traffic and what will be the hot toys, Kyser said. Not this year. And that’s unprecedented.

In all the years Kyser has monitored holiday shopping, he hasn’t seen a climate this bad since the early ’80s.

“You have to go back to ’81 and ’82,” Kyser said. “Right now it’s comparable. We’ll have to see if it gets worse.”

In fact, deflation could play a role in that. If, for example, an overstocked electronics or toy retail chain appears to be suffering from the plummeting demand, there could be a temptation to seek very deep discounts and that will nudge competitors to do the same, Kyser said. The red ink will really flow then.

“This will be a seminal Christmas season because we’ll see who shuts down after the holidays,” Kyser said. Economists expect at least one notable retail chain to go bankrupt after the holidays.

Beware gift certificates. You don’t want to buy gift certificates from a retail chain that shuts down after New Year’s. Your best bet are gift certificates from big malls like Fashion Island and South Coast Plaza because most of their stores will survive the season, Kyser said.

So, is there any good news?

Well, at least the aerospace industry appears to be stabilizing, and the motion picture business is expected to do a little better in 2009, Kyser said.

“We’ll have to see what comes out of the stimulus programs [in Washington], and they’re talking about developing infrastructure programs,” Kyser said, referring to the green-energy industrial jobs President-elect Barack Obama has proposed. “Those have a high multiplier. It takes a lot to build a bridge or to make improvements to a rail transportation system.”

Speaking of transportation, the news isn’t very good on that front either this holiday season. Travelers will also be spending a bit less and staying closer to home, said Marie Montgomery Nordhues, a spokeswoman for the Automobile Club of Southern California.

“We’re projecting a decline of a little over 2% [in travel over Thanksgiving],” she said. “It’s the fourth holiday in a row we’ve that’s had a decline in travel the year before.”

Economic anxiety has had holiday travel shrinking more and more since Memorial Day, she said.

When will it all start to turn around? Maybe by the end of 2009, Kyser said.

MICHAEL ALEXANDER may be reached at (714) 966-4618 or at michael.alexander@latimes .com. PAUL ANDERSON is the Daily Pilot’s city editor. He may be reached at paul.anderson@latimes.com or at (714) 966-4633.