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

Those fire sales have already been cited as a source of concern by high-end jeweler Tiffany & Co, and Signet Jewelers Ltd, which operates the mid-priced Kay Jewelers and Jared the Galleria of Jewelry stores in the United States.

Signet CEO Terry Burman said in August that liquidations had hurt sales at its U.S. stores open at least one year by an estimated 2 percent in the first half of the year. He expects a similar impact on same-store sales in the second half.

But some industry experts, like Jerry Ehrenwald, president of the International Gemological Institute, question shoppers' readiness to buy gold or diamonds at a store that will soon cease to exist.

HOME GOODS, ELECTRONICS

Going-out-of-business sales began around mid-October at Linens 'n Things, which will close 371 stores throughout the United States. Liquidators expect to sell more than $1 billion of inventory and store fixtures.

Bankrupt department store chain Mervyn's obtained court approval to start its liquidation sales, while discount department store chain Value City Department Stores is seeking court permission for the same.

One retailer that could face direct pressure from Linens 'n Things' is Bed Bath & Beyond Inc, which sells similar products. FBR Capital markets analyst Stephen Chick said he lowered his earnings view on Bed Bath & Beyond through 2009 as a result.

Circuit City has brought two liquidation firms on board as it shutters 155 stores. The stores being closed accounted for sales of about $1.4 billion in fiscal 2008, the company said.

The latest company to go dark was electronics chain Tweeter, which sought bankruptcy protection for the second time in two years and began store-closing sales.

Analysts worried that Circuit City's woes could pressure rivals, such as Best Buy Co Inc, to consider aggressive discounts as the holidays near, but they said Best Buy stands to gain from Circuit City's store closures in the long run.