Indulgence is in: Upscale goods are the big movers this season

Perhaps the climbing stock market put her customers in a more free-spending mood. The plug on MTV didn't hurt, either.

Whatever the reasons, it's been a boffo holiday shopping season for Jeri Rice, owner of a women's fashion boutique in downtown Seattle.

"I would say we're having a sensational season," said Rice, who estimated that December sales for her self-named store are up 35 percent over last year.

"Things are way up, people are positive," she said. "I think people just want to live their lives and enjoy and go forward."

Yesterday, as shoppers swarmed stores for returns, exchanges and post-Christmas bargains, early readings on the holiday shopping season were mixed. But upscale merchants are emerging as the season's clear winners.

Mid-priced department-store chains had to cut prices and extend hours to keep goods moving before Christmas, and even discounter Wal-Mart said yesterday that holiday sales are hovering near the low end of projections.

However, analysts said that retailers known for high-end goods, such as Nordstrom and Neiman Marcus, may enjoy the season's best results because their customers have benefited from rising stock prices and the economic recovery.

"Customers are walking out of Neiman and Nordstrom, and they've got bags under their arms," Britt Beemer, chairman of consulting firm America's Research Group, said earlier this week. "This season has been pretty squishy in the middle."

Another upscale specialty retailer, The Sharper Image, raised its earnings outlook for the fourth quarter and full year yesterday because of what the company described as "outstanding preliminary" holiday sales.

The holiday shopping season isn't over yet. The week after Christmas has become increasingly important. A year ago, the period accounted for 11.8 percent of holiday sales, up from 10.6 percent in 2001.

Analysts believe that figure will be higher this year, citing the increasing popularity of gift cards. Wal-Mart said the amount of money placed on gift cards this season is up more than 20 percent over last year.

But gift cards also make it harder to decipher holiday sales trends, since retailers can't count the revenue until the cards are redeemed. Some retail observers say it may be well into January before the industry has a more complete verdict on this year's season.

"Gift cards were a great last-minute alternative," said Ellen Tolley, spokeswoman for the National Retail Federation, who said that if consumers wait until January or February to redeem gift cards, early holiday sales figures may look weaker than they actually are.

Online shopping proved popular once again this year — Seattle e-tailer Amazon.com reported its busiest season ever, including a single-day record of 2.1 million units ordered.

Meanwhile, brick-and-mortar stores yesterday saw their usual day-after-Christmas rush, as customers flocked to clearance sales and return counters.

At the REI store in Federal Way, about 150 customers were in line at 8 a.m. for a "super-clearance" sale prompted by the store's approaching closure on Jan. 3. REI spokesman Randy Hurlow said that by 1 p.m., the store had more than tripled its sales from last year's day after Christmas.

REI opened stores in Tacoma and Tukwila last year, both of which have siphoned business from the Federal Way store.

Northgate Mall's parking lots were crammed with cars yesterday as shoppers combed the stores for deals.

"I pretty much bought for my family and friends before Christmas, so this is the first time I'm buying for me," said Rey Alvarez of Everett, holding a Bon-Macy's bag with sweats and fleece jackets he'd bought for 50 percent off.

Other shoppers wished that holiday markdowns had been more plentiful. Melis Budak, who has been visiting the Seattle area from Gainesville, Fla., said she returned several times to Nordstrom and Bon-Macy's to see if the price had dropped on a Burberry perfume set she was hoping to buy as a gift, but the price stayed firm.

"I think the bargains were much better last year," Budak said. "The prices (for perfume sets) didn't really change. They told me they just send them back (if they're not sold)."

At Jeri Rice, owner Rice said the store saw more husbands and boyfriends this year looking for high-end fashions for their sweethearts during the run-up to the holidays.

The store also has had more visits from young customers since it was featured this fall on an episode of "Rich Girls," an MTV reality show that stars Tommy Hilfiger's daughter, Ally, and her friend Jaime Gleicher, who is Rice's niece.

"I don't know about everybody else, but we're happy," Rice said.

Jake Batsell: 206-464-2718 or jbatsell@seattletimes.com

Material from Bloomberg News and The Associated Press is included in this report.