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Business

Sale Season Begins Amid Economic Doldrums

Germany's twice-yearly close-out sale begins, with thousands of shoppers making tracks to their nearest department stores. Retailers hope sales will give them a needed boost.

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Mark-down mania

As usual, the storm on the stores began at 8 a.m. Bargain-hungry shoppers across Germany on Monday eyed discounts of up to 80 percent that the country's sales-starved retailers offered at the start of their annual winter close-out sale.

"Germany's cheapest weeks are beginning," said Hubertus Pellengahr, spokesman for the Association of German Retailers.

The invasion on the stores is taking place against a backdrop of sweeping change and troubled times in German retailing. In more economically prosperous times, sales were a rare item here. Under German laws that grew out of efforts in the late 19th and early 20th centuries to protect consumers and small business, the government permitted retailers to hold close-out sales only twice a year -- once in the winter and once in the summer.

The laws dictate that the winter sale may start on the last Monday in January and the summer sale on the last Monday in July. Each sale may last only 12 days, and it can only include clothing and other textiles, shoes, leather goods and sporting equipment.

Eroding enforcement

But enforcement of the laws is eroding as retailers try to entice euros from the pockets of consumers who are seeing their taxes climb and their chances of unemployment rise. Amid this gloomy economic environment, retail sales fell about 6 percent in November and are expected to have fallen a total of 2.5 percent to 3 percent during 2002.

To offset such losses, stores immediately began to offer discounts of 50 percent after the Christmas holidays. One clothing retailer even offered customers a discount of €20 ($21.65) if they did a headstand.

The government is also planning to do its part by loosening the laws governing sales. Under a proposal released this month by Justice Minister Brigitte Zypries, stores could change the date of their sales to fit the dates for school vacations or hold annual spring and fall clearance sales. The restrictions "have done the consumer more harm than good," Zypries told the Berlin newspaper Die Tageszeitung.

As another step to help retailers, the government is proposing to give consumers four more hours of shopping time on Saturday -- until 8 p.m. But the idea has run into resistance from the huge labor union ver.di, which represents workers in the retail industry.

"The law is a slap in the face for the 2.5 million employees in retailing and for the unions which were not even consulted on the matter," a union leader, Franziska Wiethold, told the Frankfurter Allgemeine Zeitung.

Proposal Runs Into A Delay

The government originally planned to have the law take effect on April 1. But now officials hope to have it on the books by June 1. The news magazine Focus attributed the delay to resistance among union members in the Social Democratic Party, which is led by Chancellor Gerhard Schröder. A spokesman in the Economics Ministry would not comment on the report.

On Monday, though, retailers were focused on the immediate goal of the day -- moving merchandise. And they seemed to like what they were seeing. "We are really surprised. There were 200 to 250 people waiting outside the door before 8 a.m.," said Günter Biere, who runs the Kaufhof department store in Frankfurt told the news agency dpa.

Before retailers opened their doors, they were hoping to sell off the loads of winter clothing still filling their warehouses. "We are hoping on Mother Nature," said Kathrin Hauber of the Kaufhaus department store in Munich told the news agency. "If it would get really cold again, consumers will start buying."