Report Upbeat on Holiday Sales

NEW YORK CITY-A Lehman Brothers report on retail softlines was upbeat about the coming holiday season, but chain stores do have hurdles ahead, it says. Increasing gas prices, rising health care costs and less tax cut activity could all hurt results next year.

Favorable weather conditions and a strong comparison to last year will help retailers during the holiday, the report says. Retailers also have two extra selling days this year compared to 2003. These factors should lead to a 3% to 4% increase from last year’s sales, according to Lehman.

Women and teens will be buying fitted, shrunken and tailor-fitted apparel, the report says. Pants will have high waists and wide legs; skirt styles are “pencil tight or full and flouncy.” Lehman calls the biggest fabric story of the season “modern versions of classic textured tweed.” Chains capitalizing on the trend include Ann Taylor, Anthropologie, Banana Republic and Express. The report also highlights cardigans, denim, animal prints, corduroy and ponchos as hot sellers.