Holiday Sales Projections Expected to be Flat-New Survey

Holiday Sales Projections Expected to be Flat-New Survey-Image via Wikipedia

The holiday shopping season arrived early as the economy pulls from the recession doldrums, but turnaround professionals see little evidence that optimistic sales projections will cheer U.S. manufacturers.

About 80 percent of respondents to a Turnaround Management Association poll said increased holiday sales projections by the National Retail Federation are insufficient to lift domestic manufacturing orders.

“That demand increase will be filled by existing supply,” said Thomas Kim, CTP, senior managing director of turnaround firm r2 advisors llc. “There will not need to be an increase in supply.  So a net increase in U.S. manufacturing resulting from the holiday season is unlikely.”

In 2008, retailers slashed prices to encourage shoppers to little avail as the year came to a close, taking with it brand-name retailers that filed for bankruptcy.

“Retailing, more than any other sector of the American economy, is unique to the extent it is driven by performance in the so-called Christmas selling season,” said Ronald Sussman, partner with law firm Cooley LLP. “The indicators to date do not bode well for the kind of Christmas sales needed to save the year for retailers in 2010.”

Almost 70 percent of respondents expect restructuring in the retail industry to continue through:

  • store closings, 40 percent
  • Chapter 11 or 7 filings, 26 percent

Another 30 percent think lenders will proffer reprieves through “amend and extend” actions that postpone loan maturities.

“The survey results reflect the business community’s uncertainty about the direction of the economy,” said TMA President Lisa Poulin, CTP, partner with turnaround firm CRG Partners. “That’s balanced against making conservative buying decisions while working through the blocking and tackling of improving profits through operational improvements such as store closings.”

Nearly half think that holiday sales will increase at least two percent, but a third see a holiday season much like 2009, when sales catapulted from a 3.9 percent decline in 2008 to a 0.4 percent increase.  The 13 percent of respondents doubtful about a recovery expect a two percent decrease in sales.

“While economic conditions may be improving, the recovery itself will be a slow process,” said Thomas Pabst, president of HYPERAMS, LLC.  “Until unemployment rates begin to fall, it is hard to foresee us returning to a consumer-driven economic growth cycle.”

Chicago-based TMA,, is the only international non-profit association dedicated to corporate restructuring and turnaround management.

CONTACT: Michele Drayton, TMA Communications Manager, +1-312-578-2043,

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