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Jennifer Marks

On thin ice

Nary a holiday season passes without threatening to sink one retailer or another, and the opening of holiday 2002 finds not one but three retailers on the injured list.

Sears, Spiegel and Kmart each are hurting in varying degrees and for varying reasons. But they have one thing in common: some fairly ugly numbers.

Sears, despite its ongoing credit card woes, remains in the best shape of the three. A flabby holiday performance is not likely to imperil the company. It would, however, intensify the pounding Wall Street is giving Sears' stock, which last week hit a 20-year low (around $21). Sears' reputation is further sullied in comparison to the dramatic improvements now taking place at JCPenney, which boosted its margins in department stores and catalog by a whopping 130 basis points during the third quarter.

Spiegel's recent financials have been of the hair-raising variety: consolidated company sales for the first 43 weeks ended Oct. 26 down 18 percent, with e-commerce sales of 29 percent during October alone. While the Eddie Bauer business is said to be turning around, the core Spiegel franchise has yet to awaken the larger public to its presence. It's a great retail name with very little retail recognition among consumers under 35 or so.

Spiegel recently launched a new catalog dedicated to the home called Spiegel Home Bed & Bath. Executives previewed some of the home furnishings to the press in New York just prior to the recent New York Home Textiles Market. It was quite yummy, but here's the dilemma: You're not likely to see the catalog. It was supposed to drop on Nov. 8. As of Nov. 14 there was still no sign of it on Spiegel's web site, not even under the "Order a Catalog" area. Instead, the book is going out to the company's existing customers — who haven't shown themselves to be particularly interested in flinging greenbacks Spiegel's way.

Spiegel, like Sears, will not be pulled under by a rotten holiday. It will, however, have to battle all the harder going into 2003.

The weakest patient is Kmart, and the vultures are already circling its battered carcass. In early November, the news wires were buzzing with reports from the Dallas Business Journal, the Atlanta Business Chronicle and Dow Jones that Kmart was preparing to slap shut some 567 stores immediately after the holidays. That's more than a quarter of its store base. Kmart swiftly issued a denial, telling Dow Jones that it wouldn't even consider drawing up such a list until after December.

That may or may not be the case, but contretemps points to how thin the ice is under Kmart's feet. It's fortunate so many of its vendors are working to find ways to continue shipping the company, or it would have a very blue Christmas indeed.

And if all of that seems excessively dreary, bear in mind that this time a year ago, Ames was sweating it out, Fingerhut was receiving last rites and Kmart was putting together its bankruptcy filing. No disasters of such magnitude appear to be looming this year-end.

Let us count our blessings.

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