Fire sales add to U.S. retailers' holiday worries

"Shoppers are keen-eyed and walk off with the best merchandise first," Sosnick said. "In short order, the appeal of the remaining assortment diminishes greatly."

Also, liquidation sales are final, meaning purchased items cannot be returned or taken back for service. That may not seem alarming for those buying towels or sheets, but could deter consumers with items such as DVD players or jewelry in mind.

"Returns are an important part of the consumer mind-set for any category," Diane Irvine, chief executive at online jewelry retailer Blue Nile Inc, said in an interview.

GOLD RUSH?

But the particular risk this year is tied to how badly retailers as a whole are already faring. U.S. retail chains posted this week the worst October sales results in more than three decades, according to the International Council of Shopping Centers, which pared its holiday sales forecast.

Jewelry sales, in particular, have languished, as consumers have shunned buying baubles in a tough economy.

Whitehall Jewelers, which filed for Chapter 11 protection earlier this year, began liquidating jewelry worth $750 million in August.

Jeweler Friedman's was ordered by a court in April to hold a liquidation sale for jewelry worth about $400 million.

Sales at these events, expected to last till December 31, are robust, said James Schaye, president and CEO of Hudson Capital Partners, which is handling liquidations for Whitehall.

"I was a little surprised that they're doing as well as they are, especially in light of the economy," Schaye said.