Poor Holiday Season Reported by Retailers : Economy: Bargain-hunting binge Tuesday fails to salvage period. Southland fares slightly better than nation.

Shoppers turned out in droves on Tuesday and found some of the biggest bargains in recent memory as merchants throughout Southern California and the nation sought to salvage the worst holiday season in years.

But Tuesday’s turnout wasn’t enough to rescue a disappointing season in which the nation’s retailers are expected to post a sales gain of between 2% and 3% over the same period in 1994, many retail economists said. That compares to last year’s rise of nearly 6%. One month ago, these economists had predicted increases of between 4% and 5%.

On the bright side, after suffering through years of regional recession, Southern California--with a projected sales increase of 3%--enjoyed marginally better sales than the nation, analysts said. Many chains said their Southland stores have performed relatively well.

That, however, is little consolation to a retailing industry that is suffering from some basic shifts in consumer attitudes and demographics, analysts said. These changes could portend continued slow growth for the Southern California and national economy.

“There has been fundamental change in consumers’ attitudes built during a recessionary economy--and it’s a mentality that’s value-driven,” said Richard Giss, a partner at the Los Angeles offices of the accounting firm Deloitte & Touche.

“Shoppers will no longer even look at merchandise unless it has a ‘sale’ sign on it,” said New Jersey-based retail economist Kurt Barnard.

For some shoppers, said Barnard, the reluctance to spend is reinforced by concern about high consumer debt, stagnant wage growth and job insecurity resulting from downsizing at major companies.

Retailers at Sherman Oaks Galleria were among those discounting heavily, said Joy DeBacker, the mall’s general manager. DeBacker said many retailers lopped anywhere from 10% to 50% off already marked-down prices. Prices on decorations and other seasonal merchandise--already put on sale before Christmas in an unusual step--were cut even further Tuesday, she said.

One of the first early-bird shoppers at Sherman Oaks Galleria was Madelaine Mendelsohn of Van Nuys. She purchased shirts and athletic shoes that were 50% off, plus another 10% off with a newspaper coupon.

“You walk out feeling like you spent a lot of money, but you got good deals,” Mendelsohn said.

Said Mark Mandeville, shopping Tuesday at Mission Viejo Mall with his wife: “We spent about 50% less this year [on holiday gifts]. We spent about $800 because we’re trying to cut back and pay off bills.”

“With the shaky economy, it can be disaster at any minute.”

Also, baby boomers in their 40s--the group expected to provide the biggest spending punch for retailers--have been buying homes and purchasing home furnishings in recent years and are now in more of a savings mood, in part to finance their children’s education.

In addition, people in their 30s and 40s are less interested in fashion, analysts said. More people are working from home and dress at the workplace is more relaxed.

“Specialty apparel chains are the big losers,” Barnard said. “There will be more retail mergers because companies are looking for ways to cut costs and there will be more than a few [retail] bankruptcies.”

Calling this holiday shopping season the worst since 1989, Barnard declared it “the first retail downturn not attributable to a recession.

Said DeBacker of the Sherman Oaks Galleria: “If you’re in the computer business or the home business, those people are strong, but apparel is really soft. It mirrors what’s happening nationally.”

Some shoppers said they wandered out to the malls Tuesday morning because they had intentionally put off their Christmas shopping so they could get the best deals.

Mike Salas of Sylmar said that the days before Christmas were too hectic, so his girlfriend agreed that he could give her most of her gifts later, instead of on Christmas Day. So on Tuesday, Salas appeared bright and early at the Robinsons-May store in the Sherman Oaks Galleria, which opened at 7:30 a.m., and picked up a sweater that was marked down 50% and some lingerie that was also on sale.

Many malls said that they were packed with shoppers by noon. Topanga Plaza in Canoga Park opened an hour early, at 9 a.m., and closed an hour later than usual, at 10 p.m. The mall’s marketing director, Mary Lankester, said that by early afternoon the mall was bustling.

Dan Millman, general manager of Media City Center in Burbank said he was surprised when he returned from lunch on Tuesday to find the mall busy. He had thought that most people would return to work today and forego shopping.

Millman said that Christmas season sales began slowly at the Media City Center, but gained speed in the last two weeks. He believes that sales were helped at the last minute by the weather turning colder. “You can’t sell a wool sweater when it’s 85 or 90 degrees,” he said.

Now, Millman said, many merchants are discounting, but some have few clearance items left to sell. “They were more successful in their planning” this year, he said.

The Glendale Galleria was also packed with shoppers by late morning Tuesday, said General Manager Cindy Chong. About 70% of the parking spaces were full by 11 a.m., she said.

The biggest crowds at the Glendale mall were at the Disney Store, Chong said, even though it had run out of the popular “Toy Story” merchandise. “There were people with baskets of merchandise waiting to be rung up.”

Concern about weak retail spending was a factor in the Federal Reserve Board’s lowering of a key interest rate last week. However, the picture is a little brighter in Southern California. Johnson Redbook Service, which tracks retailing nationwide, said Tuesday that sales in Southern California were stronger than expected.

Sears was among the retailers faring well in the Southland. The company said it had its strongest weekly sales in history for the week ended Dec. 23 partly because sales in the Southwest were so strong.

Federated Department Stores--operator of the Bullock’s, Broadway, Macy’s and Bloomingdale’s chains--also was upbeat about its performance in California and other western states.

This will be the final post-Christmas sale for the Broadway name. Federated acquired Los Angeles-based Broadway Stores Inc. in October, and is converting 40 of the stores--or nearly half--into Macy’s and selling nine more to Sears, Roebuck & Co.

Federated is selling 10 more stores and the fate of another 21 remains undecided, with a decision possible later this year. As many as six will become Bloomingdale’s and the others could be sold, closed or retained and converted.

This also will be the final holiday season for the Bullock’s chain. Its 21 stores, all in Southern California, will be converted to Macy’s early next year. Bullock’s on Tuesday offered discounts ranging from 10% to 50%.

Final retailers’ sales results for the month of December won’t be available until early January. But heavy price-cutting nationwide apparently helped many shopping mall retailers boost sales for the final seven shopping days before Christmas. Sales for the period were 19% higher than the same period a year ago, according to the International Council of Shopping Centers. (These results don’t include department stores, strip malls, independent stores and outlet malls.)

As a result, sales at regional malls were up 4.7% from Nov. 24 to Dec. 24, the council said. However, by cutting prices more deeply to attract that rush, many retailers also slashed their profit margins.

Indeed, for some merchants, Tuesday’s clearance sales were critical for survival. However, it’s already too late for some merchants. Mall posters advertising some “store closing sales” were more evident and a sign of tough retailing times.

However, store closings also are creating more bargain-hungry shoppers. Jean McClain of Van Nuys delayed her Christmas shopping until Tuesday. It was the first time she had ever shopped for gifts after Christmas. She and two sons took advantage of markdowns at an athletic shoe chain at 10 a.m.

“Now we’re going over to the Oak Tree [apparel] store because they’re going out of business,” she said.

Patrice Apodaca in the San Fernando Valley and Greg Johnson and Dan Margolis in Orange County contributed to this story.