RETAILERS CAUTIOUSLY UPBEAT FOR BACK-TO-SCHOOL

By Sherri Cruz

Orange County retailers are midway through their first real test of the fledgling economic recovery: the back-to-school shopping season.

“We’re very optimistic,” said Blake Windal, general manager for The Block at Orange, part of Indianapolis-based Simon Property Group Inc. “Our sales are doing well.”

Back-to-school shopping, which runs from mid-July to the middle of September, is the second busiest time for retailers after the holidays.

This year, the New York-based International Council of Shopping Centers predicts a 5.4% rise in back-to-school sales from 2009, when the economy still was in recession.

Families are expected to spend 10% more this year, or $600 on average, on clothes, shoes and school supplies, according to the Washington, D.C.-based National Retail Federation.

Last year, families spent an estimated $548 each, according to the federation.

This year’s projected gains are welcome news for local retailers, which continue to see tough going amid high unemployment and the lingering mindset of the recession.

“All retailers still understand that value is what customers are looking for,” Windal said.

A survey by New York-based Deloitte LLP found that shoppers plan to spend more on clothes, with discount retailers such as Target and Wal-Mart seeing most of the spending.

Deloitte’s survery also showed more people this year plan to shop at specialty clothing stores and department stores as well.

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“That was a pleasant surprise,” said Greg Palme, an audit partner for the retail sector for Deloitte’s Costa Mesa office.

That’s a sign spending is getting back to normal and that people aren’t just shopping for the lowest price, according to Palme.

Local retailers aren’t resting easy. On any given day there’s an economic indicator that brings either cheers or consternation. Last week it was Wal-Mart Stores Inc., which said shoppers are waiting until the last minute to do school shopping.

“What troubles retailers right now is the volatility,” Palme said.

Retailers appear upbeat.

So far, so good at Costa Mesa’s Surfside Sports, which sells clothes inspired by surfing and skateboarding. The store has seen brisk sales of pants, T-shirts, lunch boxes, backpacks and messenger bags, owner Duke Edukas said.

Backpacks—usually the last to go—are selling “like gangbusters,” he said.

“This year we’ve been selling them earlier, which is a great indicator,” Edukas said.

The store doesn’t sell ordinary backpacks. They’re colorful and have bold designs, with an average price tag of about $58 and going as high as $100.

They’re made by Costa Mesa’s Hurley International LLC, part of Nike Inc., Huntington Beach-based Quiksilver Inc., Costa Mesa-based Volcom Inc. and others.

DaKine, part of Irvine-based Billabong USA, and Volcom’s Electric Visual bags have been selling the best, Edukas said.

Surfside recently held its annual back-to-school sale, with some items selling for 20% less and summer items discounted even more.

The Block also recently held its annual back-to-school “super sale” with most of its stores offering some kind of discount.

“We noticed heavy traffic,” Windal said. “We’re assuming that’s just the kickoff of it.”

The Block has a number of outlet stores, which offer department store goods at discounted prices.

H&M has been an early back-to-school winner with its trendy clothes at relatively lower prices, according mall operators.

Sweden’s H&M Hennes & Mauritz AB has stores at The Block, Brea Mall, Irvine Spectrum Center and South Coast Plaza. Another is opening this year at The Shops at Mission Viejo.

On a recent weekend, H&M at Irvine Spectrum Center had long lines of people waiting to check out, as did Old Navy and Urban Outfitters.

Bed Bath & Beyond is one of the Market Place’s busiest stores during the back-to-school season.

“They really market well to the college student population,” said Nina Robinson, spokeswoman for the retail arm of mall operator Irvine Company.

Others doing brisk business at Irvine Co. shopping centers, according to Robinson: Anthropologie, Old Navy, Lululemon and Jack’s Surfboards at Corona del Mar Plaza.

“We still believe that the worst is behind us, and we are gaining steady and positive momentum,” Robinson said.

Ikea in Costa Mesa has been busy selling towels, cookware, lamps and other items to the college crowd. In July, weekday sales were up 16% from a year ago, while weekend sales were 26% higher, spokeswoman Yumiko Whitaker said.

During August, Ikea has many of what it calls its “red peak” days of busy shopping after its yearly catalog arrives in homes.

“It’s all hands on deck,” Whitaker said. “It’s been pretty healthy, pretty brisk for us.”