Holiday shopping scouting report

The holidays are a time for retailers to dazzle. They polish their stores, design eye-catching displays and pull out all the stops to reel in consumers with hot deals and cool gadgets. On average, retail businesses hope to collect 40 percent or more of their profits for the year in November, December and January. For some, such as Wilsons the Leather Experts, it's the only time all year they're profitable. This year, Minnesota's largest retail chains head into this crucial season trying to open the wallets of consumers who are worried about a shaky economy, are paying more for gas and milk and other daily items, and have record levels of personal debt and fewer places to borrow money. Forecasters predict that retailers across the country will see the slowest sales growth in five years. Here's a preview of our retail landscape.

BEST BUY

Headquarters: Richfield

Number of stores: 1,150 in the U. S. and Canada -- and one in China

Last year's quarter: $12.9 billion

Share of annual sales: 36%

Friday's stock close: $46.84

52-week range: $55.84-$42.69

Momentum going into the holidays: Best Buy enticed its frequent "Reward Zone" customers to the store a week ago for an exclusive shot at special deals, a sign that this year's sales are all about generating buzz. Its U.S. sales are slowing: While revenue increased 15 percent last quarter, most of that growth came from Canada.

What the Street is watching: Sales of big-margin items such as high-definition TVs and video game software. More than half of profit -- 54 percent last year -- traditionally comes in the final quarter. And a growing percentage of its sales have been logged in the fourth quarter, which doesn't include November's numbers.

What consumers can expect: Deals on computers, televisions and video games, plus gadgets such as global positioning systems. Black Friday shoppers will see no-interest offers on some plasma TVs. The "blue shirts" will push customer support and in-home set-up for complex home theater systems to avoid returns.

CHRISTOPHER & BANKS

Headquarters: Plymouth

Number of stores: 825 in 45 states under the names of Christopher & Banks, C.J. Banks and Acorn

Last year's quarter: $134 million

Share of annual sales: 24.5%

Friday's stock close: $16.21

52-week range: $22.67-$11.43

Momentum going into the holidays: Sales surged 22 percent last month, after a successful weekend promotion in which everything was marked down 40 percent for employees, friends and family members. The retailer timed it so that one day of the sale fell during October's sales period while the next counted toward November's.

What the Street is watching: New CEO Lorna Nagler, who came on board in August after CEO Matthew Dillon abruptly left.

What consumers can expect: A strong pitch to its core customer -- 40- to 60-year-old women who prefer comfortable clothes to haute couture. The company has said it plans to reduce inventory levels and delay sales on holiday-themed products until closer to Christmas. Unlike many retailers, its sales and profit are more evenly distributed throughout the year.

GANDER MOUNTAIN

Headquarters: St. Paul

Number of stores: 115 in 23 states

Last year's quarter: $327 million

Share of annual sales: 36%

Friday's stock close: $5.56

52-week range: $15.99-$4.57

Momentum going into the holidays: Sales are increasing at the outdoor specialty retailer, but the company lost money the previous two quarters. The hunting season and holidays typically boost traffic. A judge's ruling this summer freed the company from legal shackles that had prevented it from selling anything online or in catalog sales, but so far no deal has been inked.

What the Street is watching: Investors are cautious about the hunt-fish-camp category, but Piper Jaffray analyst Mitch Kaiser, for one, likes Gander's new store format that gets away from the warehouse look. Observers have also lauded Gander's decision to expand in Southern states to mitigate seasonal fluctuations. A line of pink firearms for females is generating buzz, but will it translate into sales?

What consumers can expect: Contests and cash-back deals. For the first time, stores will be open nationwide from 3 to 6 p.m. on Thanksgiving. Among the offerings: A chance to win a turkey hunt for two in the Black Hills with a Gander Mountain pro.

MACY'S

Headquarters: Cincinnati

Number of stores: 850 in 45 states, including 61 in the Midwest region, which is based in Minneapolis

Last year's quarter: $9.16 billion

Share of annual sales: 34%

Friday's stock close: $28.32

52-week range: $46.51-$28.32

Momentum going into the holidays: Gone is any curiosity about how warmly the Marshall Field's faithful would welcome Macy's. The answer: Not so much. October's same-store sales were down 2.7 percent, and customers have complained about coupons, service and quality of merchandise.

What the Street is watching: Whether the focus on brands, such as Martha Stewart and Charter Club, will finally grab customers. Department stores as a whole lost 1.4 percent in same-store sales in October, compared with last year's gain of 6.3 percent, and it's unclear whether cash-strapped consumers will embrace the department-store concept, or go deal-shopping elsewhere.

What consumers can expect: Bargains everywhere. Walk through a store and those little red discount signs are on nearly every rack, with winter coats marked down 40 percent. Macy's is turning on the charm to reel in new customers, testing concepts such as a styling specialist for younger shoppers at Southdale, and offering free Wi-Fi and wine at its State Street store in Chicago.

TARGET

Headquarters: Minneapolis

Number of stores: 1,591 (210 SuperTargets) in 47 states

Last year's quarter: $19.7 billion

Share of annual sales: 33%

Friday's stock close: $53.88

52-week range: $70.14-$53.88

Momentum going into the holidays: A late boost from Halloween sales saved the nation's second-largest discount retailer from flat October sales. Target earns 80 percent of its profit from home items and clothing sales, high-margin categories that have been soft in recent months. One big issue for the retailer of late: getting traffic in the door.

What the Street is watching: How the economy will affect Target's more upscale discount shoppers. Jitters over the company's pending announcement about whether it will sell its credit-card receivables are cropping up as well.

What consumers can expect: Instead of all-out price slashing, Target hopes to wow customers with a sweepstakes contest between Nov. 25 and Dec. 1. Another good deal: Free shipping and online discounts on furniture.

WILSONS THE LEATHER EXPERTS

Headquarters: Brooklyn Park

Number of stores: 412 in 45 states

Last year's quarter: $133 million

Share of annual sales: 41%

Friday's stock close: $1.07

52-week range: $2.53-$1.01

Momentum going into the holidays: Wilsons is entering its pivotal period on a downward slide. Same-store sales fell 22 percent in October, compared with last year, and the company has lost $1.71 a share in the first half of the year.

What the Street is watching: Historically, the chain loses money in every quarter but the last. But it used to do a better job making money in the fourth quarter. In 2001 it earned $3.51 a share in its final quarter. Last year: 31 cents. "It is now 'put up or shut up' time," Eric Beder of Brean Murray Carret & Co. said in a recent report.

What consumers can expect: Markdowns of 40 to 60 percent haven't drawn customers, so broader and deeper cuts are likely.

Jackie Crosby • 612-673-7335

Jackie Crosby • jcrosby@startribune.com