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CNN Saturday Morning News
Interview With Vera Gibbons
Aired November 24, 2001 - 11:35 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KYRA PHILLIPS, CNN ANCHOR: It's time to polish off that turkey, put on some comfortable shoes and head for the mall. The holiday shopping season has officially begun. Now while retailers are hoping for the best, shoppers are definitely looking for some savings.
Joining me now to talk about the economic outlook is Vera Gibbons from "Smart Money" magazine.
Hi, Vera.
VERA GIBBONS, "SMART MONEY" MAGAZINE: Hi Kyra, how are you?
PHILLIPS: I'm doing OK. I haven't done very much shopping lately, but I'm sure -- what about you?
GIBBONS: None yet. I wait until the 24th.
PHILLIPS: Yes, I hear you. I'm a procrastinator too. It runs in the family. Well let's talk about just the economic situation right now, and first of all, how much is it going to take, how much shopping is it going to take to really make an impact for the end of the year, you know, talking about earnings and profits and just getting life back to normal?
GIBBONS: Well it's going to take an awful lot of shopping. Anyone who thinks that this shopping season is going to be great is kidding themselves. I mean there's so many bargains out there. Everything's been incentivized, all sorts of promotions going on.
Even if people are out there buying things, these retailers, how are they going to turn a profit? It doesn't look good for a lot of the retailers, particularly for the high-end retailers. They're stuck with all this excess inventory. There are very few buyers.
They slashed the prices big time and people still aren't buying the high-end gifts. They're buying the cheap, inexpensive stuff, the stuff from Wal-Mart, the stuff from Target, from the discount retailers.
In fact, this holiday season, discount retailers are actually going to do OK. They're going to see sales grow anywhere from two to four percent. It's the department stores, in particular, that are really going to suffer. They're going to see sales actually go down by two to four percent. So many of the retailers are bracing themselves for what could be one of the most difficult holiday seasons they've seen since 1990.
PHILLIPS: Well, now looking at the numbers too, I guess sales were forecasted, about a two percent drop, is that right? It seems low, but actually we're talking billions of dollars, correct?
GIBBONS: Yes, that's right. Well the National Retailer Federation had been predicting that sales were going to grow about four percent in this final quarter of the year. Now they're saying that sales are only going to grow by about two percent.
You're right, it doesn't sound like much of a decline, but in dollar terms, this is a $5 billion decline, so significant.
PHILLIPS: OK, now there was an article in your magazine. I was just talking to you just a minute ago about these hints that you point out, these things to be aware of that retailers won't tell you. So people are going out. They're looking for the bargains. They're looking for the sales. There might be even more things that we need to look out for, correct? You mentioned the discount shops. These outlets --
GIBBONS: Right.
PHILLIPS: Are these really outlets? I've always wondered that.
GIBBONS: Keep in mind that some fashion designers do make lines specifically for the outlets, so you want to take a look at the price tag. If the price tag says "compare at" followed by a price, chances are you're getting something that was made specifically for the outlets.
If on the other hand, the price tag says "original price" followed by a lower price, then you're getting typically the real deal, not some of the junk that is made for the outlets. A lot of stuff that ends up there is just like seconds and discolorations and poor fabrics.
PHILLIPS: Yes, I've had my experience. What about the one quote I was looking at in your list here. "Our return policy is half- baked."
GIBBONS: Right, well a lot of the electronic stores do charge consumers restocking fees when they go to make returns or exchanges. They don't necessarily tell you about these restocking fees at the time of purchase. So you're stuck paying, you know, ten, twenty percent.
You want to be clear as to what their restocking fee is at the time of purchase if at all possible. But again, these stores don't tell you or they downplay it or it's in the fine print. So be very clear on what the restocking fees are at the time of the purchase.
PHILLIPS: What about commissions? You know, they say "I'm not on a commission. I just get kickbacks from the store." Is that true, and do commissions go up during this time?
GIBBONS: Well yes, some of the salespeople actually get kickbacks directly from the manufacturers, so if they're pushing you toward a particular brand, chances are it's because they're getting direct kickbacks from the manufacturer. It could be $50. It could be $100. So that's probably why they're steering you toward one particular brand over another.
Another thing these stores do is they send in, companies send in reps into the various stores to promote their products. These reps don't always identify themselves, so if they are steering you toward a particular brand, like HP for example, chances are they actually work for HP.
PHILLIPS: So should we shop online?
GIBBONS: Well, I think a lot of people are going to be shopping online this holiday season. In fact, some of the analysts are saying that online shopping is going to go up ten, eleven percent this holiday season. That people are going to spend, $11, $12 billion online. So they're optimistic on that front.
PHILLIPS: Wow. All right, I'll probably be one of them too. Catherine, also. Vera Gibbons, thank you so much. Get that "Smart Money" magazine and check out those tips.
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