NEW YORK — The holiday shopping season begins Friday with a blitz of early morning specials. For some merchants, though, it’s practically over already.
Piles of jewelry, clothing and electric drills are bypassing store shelves and heading straight to liquidators by the caseload as stores try to save as much cash as they can.
Major department stores and mall-based chains have cut prices up to 70 percent to move out mounds of excess inventory stuck in the pipeline since the financial crisis hit in September and people snapped their wallets shut.
Big moves of merchandise happen every year — but usually after Christmas. This year, stores are desperate to shed inventory even before Thanksgiving.
“The holiday season is over. The reason? It just never got started,” said Marshal Cohen, chief industry analyst at NPD Group, a market research firm. “How cheap things are doesn’t bode well for holiday success.”
The deep price cuts even on luxury brands — think 40 percent off on $5,000 Chanel suits and 70 percent off on designer shoes at Saks Fifth Avenue and 40 percent off $695 Ralph Lauren leopard-printed pumps at Bloomingdale’s — are only good news for the dwindling pool of consumers who are comfortable enough financially to take advantage of the deals.
Experts say discounts are only going to get even better as stores resort to more extreme measures to clear out unsold items. The value of coats and sweaters drops dramatically as the winter months wear on.
Still, there is some incentive for choosy consumers to buy early: increasingly lean inventories mean that certain colors, sizes and styles may sell out. For those who are open minded, it’s a bargain hunter’s dream.
It wasn’t supposed to be this bad. Stores, which typically place orders about four to seven months in advance, had cautiously planned their holiday inventories about 15 percent below last year’s levels.
But because of the free fall in consumer spending, stores are now stuck with about 15 percent to 20 percent excess holiday inventory, estimated Burt Flickinger, managing director of Strategic Resource Group.
Richard Hastings, a consumer strategist with Global Hunter Securities, says the latest culprit — fear of deflation — is also causing stores to dump inventory. Clothing and other merchandise is worth less now than it was even three months ago.
“Prices are slipping too fast, and so by the time you sell the product, stores are not covering their operating expenses,” he said.
But stores are only making matters worse. The more they discount and send to liquidators, the lower the prices become. Consequently, stores generate less in sales.
Still, in the current economy, they have no choice. Carrying inventory is a big expense, and stores need to preserve cash at a time of tightening credit.
Pier 1 Imports will hold a weekend-long sweepstakes that begins Friday. The winner can take home a new car and a gift certificate while runners up get $500 store gift certificates.
Bed, Bath &Beyond is offering early bird shoppers an extra 20 percent discount on their entire purchase between 6 a.m. and 10 p.m. on Friday.
Macy’s will offer shoppers a $10 discount on any $25 purchase until 1 p.m. Friday.
Williams-Sonoma stores are offering shoppers a $10 coupon for every $50 they spend during the weekend. The coupon can be used after Dec. 26.