UPDATE 2-‘Year of the sweater’ sees rising U.S. retail sales

* US retail sales in Nov top expectations

* Online retail sales up 12 pct in holiday’s 1st 40 days

* Planalytics dubs it the “year of the sweater”
(Adds new ICSC holiday forecast in paragraph 5)

By Ben Klayman

DETROIT, Dec 14 (BestGrowthStock) – Demand is strong at David
Dumas’ South Carolina men’s clothing store, but after being
battered during the past two holiday seasons by the recession
and financial market meltdown, he does not want to get too
excited.

“I don’t want to jinx it, but we are up 40 percent in
December so far,” he said. “It’s been a fun fourth quarter.”

This holiday season has so far been looking up for many
U.S. retailers as people flocked to stores in greater numbers
for the traditional “Black Friday” shopping kickoff, and many
retailers said customers kept coming through the first part of
December.

On Tuesday, the Commerce Department reported a 0.8-percent
increase in U.S. retail sales in November, with a gain,
excluding autos, of 1.2 percent that doubled expectations.
[ID:nN14261708]

Also, two leading retail trade groups — the International
Council of Shopping Centers and the National Retail Federation
— raised their holiday sales growth forecasts due to the
strong results. [ID:nN14271743]

The data and comments from store owners and shoppers
suggest the U.S. economy is regaining strength and shrugging
off fears of a double-dip recession that were seen this summer.
Consumer spending makes up about 70 percent of that economy.

“The sun appears to be rising again in the retail world,”
said Lawrence Creatura, a portfolio manager at Federated Clover
Investment Advisors.

In fact, Dumas, the 49-year-old owner of M. Dumas and Sons
in downtown Charleston, credits a rebound in demand after a 7
percent sales decline in 2009 to the city’s balmy winter
weather and its strong tourism industry.

Retailers are happy and relieved to see more shoppers like
Migna Cruz, who works at a hospital in Hoboken, New Jersey.

“I’m a little more confident and doing a little better,”
said the 44-year-old mother of four, who was shopping at a
Kohl’s (KSS.N: ) in the Newport Centre Mall in Jersey City.

Lane Cowan, a manager at Francesca’s Collections, a women’s
clothing, jewelry and gift boutique in the affluent Kansas City
suburb of Overland Park, Kansas, expects an improvement on last
year’s 10 percent sales increase.

“We have awesome traffic and we are beating last year,”
Cowan said.

The trends were just as promising on Saturday at several
shopping centers managed by Taubman Centers. (TCO.N: )

At the company’s Beverly Center in Los Angeles, sales were
up mid-single digits to low-double digits on a percentage basis
as tourists drove luxury purchases, while jewelry stores at the
Woodfield Mall outside Chicago saw strong sales.

Heavy snowfall on Sunday affected shopping at some centers
in the Midwest, but strong sales the rest of the week were
offsetting that, Taubman said.

Despite the weekend snow, Mother Nature was largely
cooperating.

“With a few exceptions, you couldn’t ask for better weather
nationally,” said Scott Bernhardt, chief operating officer for
Planalytics, which provides weather data for businesses.

“They’re buying the TV and they’re buying the scarf and the
hat. We’re calling it the year of the sweater because people
are getting pushed into apparel,” he said, adding that the
recent Midwest snowstorm would not have a large impact on
sales. [ID:nN13215832]

In fact, Troy Risch, executive vice president of stores for
Minneapolis-based Target Corp (TGT.N: ), who had 20 inches of
snow in his driveway on Sunday, was looking on the bright side.
“What it has helped with is our boot sales, jackets.”

The Commerce Department report continued the streak of good
news in the retail sector as U.S. online retail sales for the
first 40 days of the holiday shopping season jumped 12 percent
to more than $21.95 billion, according to research firm
comScore (SCOR.O: ).

Analysts warn, however, that the results are being
bolstered by discounting that could crimp retailers’ profits.

“Everything is on sale everywhere,” said Linda Sklaren, a
New York lawyer shopping for holiday gifts for her husband and
children at Saks’ flagship store on Manhattan’s Fifth Avenue.

A Consumer Reports study released on Tuesday suggested
retailers may even have to increase discounting as fewer of
those surveyed than last year planned December purchases.

For those who do not discount enough, however, Best Buy’s
(BBY.N: ) fate awaits. The top consumer electronics chain posted
a lower-than-expected quarterly profit and a surprising drop in
same-store sales as demand for TVs slid. [ID:nN13207737]

While consumers are now shopping with more cash and less
credit, some are still having to stretch for the holiday.

Jennifer Dulny, a 44-year-old Shawnee, Kansas, resident,
said she and her husband withdrew money from their retirement
account this year to help pay for Christmas presents for their
two young children.

“Our kids still believe in Santa Claus … and if you cut
back for your kids it really just kills the magic,” she said.
(Additional reporting by Barbara Liston in Orlando, Carey
Gillam in Kansas City, Brad Dorfman in Chicago, Jon Lentz and
Phil Wahba in New York, Verna Gates in Birmingham, Alabama, and
Harriet McLeod in Charleston, South Carolina; Editing by
Maureen Bavdek)

UPDATE 2-‘Year of the sweater’ sees rising U.S. retail sales