Oct 12, 2007

Big Retailers Cutting Prices to Reverse Weak SalesBy Michael BarbaroNYTimes.com

Retailers are in for a tough fall — and consumers are in for deep discounts.

Big chains reported a bleak September yesterday, with sales at stores open at least a year rising just 1.7 percent, the weakest performance in five years, according to the International Council of Shopping Centers, a trade group.

As a result, more than a dozen retailers, from the luxury emporium Nordstrom to the discounter Target, cut their earnings forecast for the final three months of the year.

Those troubles will be a boon to shoppers: To clear all that unsold fall merchandise in time for the crucial holiday shopping season, retailers are expected to dangle steep markdowns in coming weeks.

“Managers and district managers don’t know where to put all this clothing,” said John D. Morris, a retail analyst at Wachovia Securities. By his estimate, markdowns are up 5 percent this fall compared with the same period a year ago, “and rising fast,” Mr. Morris said.

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