Nation’s Retailers See Best Holiday Sales in 4 Years : Economy: Figures were up an estimated 7% to 10%, except in Southern California, where all but a few reported declines or weak gains.

A surge in December sales provided the nation’s retailers with their best Christmas season in four years, according to reports Thursday that show a strong year-end performance for department stores, discounters and specialty apparel shops.

But there was no Christmas cheer for Southern California retailers: Analysts’ estimates ranged from a 3% sales drop compared to December, 1991, to a weak 3% gain over the year-ago period. Some Southland retailers had surprisingly strong sales, but most merchants continued to struggle in what remains one of the nation’s weakest economic environments.

Nationwide, estimates of the sales increase ranged from 7% to 10%. Much of that is attributable to a jump in apparel sales--a surge that helped reverse the fortunes of department stores, which had suffered through holiday season sales declines in 1991 and 1990.

“Nationally, it was not a good holiday season for retailers--it was a great season,” said retail analyst Ed Johnson of New York-based Johnson Redbook Service.

“It was the best performance by the industry since 1988,” said Richard Nelson, an analyst at Chicago-based Duff & Phelps. Before Thursday’s sales reports, Nelson had predicted a nationwide sales increase of 4% to 6%. He now says sales actually rose about 7%.

Department stores led the recovery. Overall, December department store sales rose 8% in the nation compared to a year ago, said analyst Walter Loeb of New York-based Loeb Associates. Sales at discount stores--Wal-Mart Stores Inc. and Kmart Corp. are among the retailers in that category--rose 5%, Loeb said. And sales by specialty apparel stores, which include companies such as Gap Inc. and Limited Inc., rose 7%.

“There was pent-up demand for apparel,” Loeb said. “Consumers decided to spend money on fashion, and clothing sales are especially important to department stores.”

On the other hand, Loeb described the sales situation in Southern California as terrible, attributing the performance to the litany of problems in the state--including layoffs in the aerospace, computer and real estate industries.

However, some retailers did fairly well in Southern California. For example, 72 of the 87 stores operated by Los Angeles-based Carter Hawley Hale Stores, parent of the Broadway chain, are located in California. Despite its heavy presence in California, sales from stores that have been open at least a year--known as same-store sales--rose 5.3%, and overall sales climbed 6.2%.

“December sales, like November’s, exceeded our expectations,” said Philip M. Hawley, the firm’s chairman and chief executive.

On the other hand, Minneapolis-based Dayton Hudson Corp. said its California sales were “substantially weaker” than its business in the rest of the country. Dayton Hudson has 113 Target stores and 118 Mervyn’s stores in California. Nationwide sales from its 837 stores in 33 states were strong--rising 9.5% on a same-store basis and jumping 16.6% overall.

As for other department store chains, Sears had an 8.2% same-store sales increase and a 7.3% gain overall. St. Louis-based May Department Stores recorded an 8.7% same-store rise and a gain of 11.7% overall. And J. C. Penney Co. Inc. said same-store sales at its flagship J.C. Penney stores jumped 9.1% and 10.3% overall.

Major discount retailers also had sales surges. Wal-Mart, the nation’s largest retailer, said its same-store sales rose 10% from year-earlier levels, while overall sales picked up 27%. And rival Kmart said its same-store sales rose 2.4%, while overall business was up 9.1%.

Among major specialty retailers, the Limited reported a same-store sales jump of 9% and an overall rise of 20%. And the Gap had a same-store sales gain of 5% and a total increase of 17%.

Despite the strong finish for 1992, most industry observers believe that the nation’s hot sales pace will be short-lived.

“Until we get employment up and see some wage growth, a continued buying binge is unlikely,” said Ira Kalish, an analyst at the Los Angeles offices of Management Horizons, a division of Price Waterhouse. “Sales growth will continue, but it will be less dramatic.”

Resurgent Retailers Strong December sales gave the nation’s retailers a memorable Christmas season and boosted year-end performance.

Sources: U.S. Commerce Department and Management Horizons, a division of Price Waterhouse.