Dec. 21 (Bloomberg) -- Bloomingdale's employees outnumbered lunchtime shoppers in the New York store's main-floor cosmetic department yesterday as the city's first transit strike in 25 years kept customers away. The store said today it would close early.

The city's retailers, including Federated Department Stores Inc.'s Bloomingdale's and Macy's and Saks Inc.'s Saks Fifth Avenue, may have lost as much as $230 million in revenue, said Kurt Salmon Associates Inc.'s Michelle Bogan. The strike is occurring at the worst possible time for the companies. Stores make about 20 percent of their holiday sales during the period.

``These are critical days, and there is no way to make up the loss even of a day or two,'' said Howard Davidowitz, chairman of Davidowitz & Associates Inc., a New York consulting and investment-banking firm. ``Do you think people are going to be in the mood to go shopping? Of course not.''

Bloomingdale's signs today did not specify the earlier closing time. Its normal closing is 10 p.m. It was offering 15 percent off all purchases for two days to customers who applied for a new Bloomingdale's charge card, instead of the usual 10 percent off for one day. It also doubled its incentives for existing cardholders.

Tiffany & Co., the biggest U.S. luxury-jewelry retailer; Gap Inc., the largest U.S. apparel chain, and women's clothing-seller AnnTaylor Stores Corp. were counting on these final holiday shopping days to boost lagging sales. Half of Americans had completed their holiday shopping by Dec. 18, compared with 65 percent at the same time last year, according to America's Research Group in Charleston, South Carolina.

Neighborhood Shops

As shoppers get efficient and switch to the Internet and their neighborhood shops, retailers will lose out on a lot of impulse purchases, said Bogan, a retail strategist at New York- based Kurt Salmon.

Manhattan represents 10 percent of sales at stores open at least a year at Cincinnati-based Federated, which also owns Lord & Taylor, and 20 percent of such sales at Birmingham, Alabama- based Saks's Saks Fifth Avenue division, according to Michelle Tan, an analyst with UBS Securities LLC in New York. She rates Federated ``buy 1'' and Saks ``reduce 2.''

Each day transit workers remain on the picket lines will trim December same-store sales by 0.15 percentage point at Federated and 0.3 percentage point at Saks Fifth Avenue, Tan wrote in her research note yesterday.

Federated

U.S. same-store sales are expected to rise 3 percent to 3.5 percent in December, the International Council of Shopping Centers reiterated yesterday.

Federated's shares rose 28 cents to $65.51 at 4:01 p.m. in New York Stock Exchange composite trading. They have climbed 13 percent this year. Saks's shares gained 10 cents to $16.37.

``Retail continues to be crippled,'' New York City Mayor Michael Bloomberg said at a press conference today. ``Shopping hubs that require mass transportation are getting hammered.''

The Fulton Mall in Brooklyn has stores where business is down 90 percent and Fordham Road, one of the Bronx's retail hubs, has experienced a 60 percent drop in sales, Bloomberg said. The mayor is founder and majority owner of Bloomberg News parent Bloomberg LP.

Bloomingdale's, Macy's and Saks took measures to help employees get to work, providing bicycle storage, reimbursing employees for parking and setting up Web sites and hotlines.

Macy's was giving an extra compensation day to employees who worked yesterday and two days if they worked a 12-hour shift, said Michelle Dingle, 27, who helps in the store's Kids Headquarters. Her section, which caters to teens, wasn't busy, even though it was having a one-day sale offering more than 50 percent off.

FAO Schwarz

FAO Schwarz Inc. is closing at 6 p.m. instead of 9 p.m. during the strike so employees can get home, said Chief Executive Officer Ed Schmults.

``Yesterday, the first day of the strike, we had very heavy traffic in the morning and into the late afternoon,'' said Schmults in an interview. ``Then we saw a pretty steep drop-off, which made the early close less of a financial hit.''

He said one employee drove in at 3 a.m. and slept in his car and another had his bike break down, bought a new one at Target Corp. and came to work.

Should the strike continue into Friday, stores won't meet their sales plans and will cut prices, lowering margins, said Walter Loeb, president of Loeb Associates, a retail-consulting firm in New York.

Sales Jeopardized

Closely held Neiman Marcus Group Inc. owns the two Bergdorf Goodman stores on Fifth Avenue. Three percent of the Dallas-based retailer's total quarterly sales could be jeopardized, Christopher Kresco, a high-yield bond analyst at Montpelier, Vermont-based KDP Investment Advisors Inc., wrote in a report today.

Retailers will likely try to reschedule promotions, which now won't generate sales, Davidowitz said.

``The plan will be to play the week after Christmas bigger,'' he said. ``It's a big week anyway. You pound a lot of extra promotions into that week, have post-strike sales.''

While Tiffany's counts on its flagship location on Fifth Avenue for 10 percent of company sales, the overall impact of the strike should be minimal as commuters shift their buying to one of its seven other stores in the region, Mark Friedman, an analyst with Merrill Lynch & Co. in New York, wrote in a report yesterday. Tourists typically stay in a midtown hotel, walking distance to the store, he added. He rates the shares ``neutral.''

Gap

Tiffany's shares dropped 20 cents to $38.69 in New York Stock Exchange composite trading.

San Francisco-based Gap and New York-based AnnTaylor are the specialty-apparel chains with the most exposure to New York, wrote Prudential Equity Group Inc. analyst Stacy Pak, who rates the shares of both companies ``overweight.''

Abercrombie & Fitch Co., which has added a Fifth Avenue store to its two other Manhattan locations, could see its December same-store sales trimmed by less than 1 percentage point by the strike, Bob Buchanan, an analyst with A.G. Edwards & Sons Inc. in St. Louis, wrote in a report today. Williams-Sonoma Inc. has 2 percent of its store base in New York, he wrote.

Gap's shares dropped 12 cents to $17.57 in Big Board composite trading, while AnnTaylor jumped 69 cents, or 2.1 percent, to $34.43. Abercrombie & Fitch rose 29 cents to $63.76.

At discount-store Century 21 in downtown Manhattan, a sign outside the door yesterday noted, ``Store is subject to early closing due to MTA Strike,'' and inside crowds were about half of what they usually were, estimated Emily Spray, 43, a regular shopper. ``It's improved my life because there are no lines,'' said Spray, who was prepared to load her Christmas shopping on a baby seat.

``The holiday selling season has not been particularly good so far,'' Pak wrote, ``and a New York City transit strike was basically the last thing the retail sector needed.''

To contact the reporters on this story: Cotten Timberlake in New York at ctimberlake@bloomberg.net; Andria Cheng in New York at lcheng@bloomberg.net.

Last Updated: December 21, 2005 17:38 EST