RETAILERS ENTERING CHRISTMAS MODE STOCK WOES, WAR TALK BODE UNCERTAINTY.

Byline: Kathleen Sweeney Staff Writer

SANTA CLARITA - It was months before Christmas when throughout the Southland, retail store clerks were working, hanging ornaments and other holiday contraband.

The trees were trimmed, the stockings hung, and the lights in the miniature village displays were turned on.

Though some shops around Santa Clarita were stocked with their holiday gear, there were questions about the Christmas cheer. Would St. Nick visit everyone's house this year?

Experts say with the stock market down and unanswered questions of war, retailers are uncertain what they are in for. But there's some good news: The National Retail Federation predicts sales will be up by 4 percent.

``There are a lot of question marks,'' said Jack Kyser, chief economist with the Los Angeles County Economic Development Corp. ``It's going to be a tough Christmas season. There will be a lot of hand-wringing.''

Earlier and earlier each year, stores are hanging up their Christmas cheer, and this year was no exception. Santa Claus cookie jars, Hallmark ornaments and table decorations started appearing last month - three months before Christmas Day.

At Gifts in the Attic, which relocated its shop in March to the Promenade mall in Valencia, its theme-decorated trees appeared last month shortly after workers had set up for Halloween.

``Never before Sept. 1,'' said Sally Valerius, who has owned the unique gift shop for 20 years and always sets up some of her Christmas displays in September. ``People are always thinking about it. Probably, when the economy is tight, people start to shop earlier for Christmas than ever. Usually, people wait until the last minute and buy whatever they want. I don't think that's probably true this year.''

Along with the unstable market, there are other red flags rising in the eyes of the consumer and retailers, Kyser said. There are fewer days between Thanksgiving and Christmas, continuing problems with the West Coast port workers and disappointing sales during September.

As baby boomers age, they are giving more service gifts, such as spa treatments and family vacations, Kyser said. They're only buying if it's something new and interesting.

Then, there's war.

``The million-dollar question hanging over everybody's head is what is going to be done about Iraq,'' Kyser said.

Recent polls show that more than one-third of Americans fear the economy will get worse if the U.S. attacks Iraq - an act Congress approved early Friday morning.

Experts said the uncertainty of an Iraqi war and the terrorist threats is making it difficult for the market to get moving.

For the economy to grow and the market to rebound - which is expected to happen gradually during the next year - consumers must continue to spend because the business sector isn't, Kyser said.

Along with the early holiday cheer to get people into the mood, consumers can expect to see the usual nonstop sales this season.

At the Town Center mall, several stores have started dressing themselves in Christmas garb, but the mall never hangs its decorations before the first week of November as it's involved with other events during this month, such as Bella Via.

But there are no worries here, said mall General Manager Charles Gill. Unlike other areas of Southern California, growth has continued to boom in Santa Clarita, housing sales are up and residents are spending.

``We feel pretty positive about this Christmas,'' he said. ``We have a couple of exciting things happening at the center.''

Sears has recently remodeled its store and plans to launch the sale of the Land's End catalog clothes on Nov. 15, he said. A few other stores, including KB Toys, have also remodeled their shops.

``The stores are well stocked and my impression of their customers, while they might be a little cautious, (is) they are going to save money until Christmas and give gifts like they normally do,'' Gill said.

The key is to price point items, Valerius said. Consumers might not buy six presents for one this year, but instead maybe four. Others might not spend $50 on gifts, but might be willing to spend $20. At Gifts in the Attic, there's something for everyone.

``I don't think it's going to be a record year, but I think people will still buy and choose more carefully,'' she said. ``They will just lower the price points a little bit.''

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Photo:

Sally Valerius is reflected in a mirror as she adjusts ornaments on a Christmas tree in her Gifts in the Attic store. Many retailers are uncertain what kind of holiday season they are in for.

Andy Holzman/Staff Photographer