Discount Stores

Ninety-nine cents just doesn't go as far as it used to, and that's a problem for the 99 Cents Only Stores chain. Faced with fast-rising inflation and soaring food prices, the retailer -- known for never selling anything for more than 99 cents -- is reevaluating its pricing strategy. And that could mean breaking the $1 barrier for the first time in the company's 26-year history. "There's no question we're going to need to do something," Chief Executive Eric Schiffer said to analysts this month after the company reported its second consecutive quarterly loss.

The Mervyns department store chain said Wednesday that it planned to close nearly 15% of its stores -- including seven in Southern California -- as it attempted to rework its finances two weeks after filing for bankruptcy protection. The company will shutter 26 of its 176 mid-priced locations in California, Arizona, Idaho, Nevada and Texas by late October or early November.

Tax rebate checks boosted spending last month at wholesale clubs and other stores where shoppers go looking for bargains, but many retailers continued to struggle as gasoline prices and layoffs worried consumers. Sales at stores open a year or more rose 4.3% in June, compared with a gain of 2.4% in the same month last year, according to the International Council of Shopping Centers' tally of 38 chains nationwide. That was the strongest monthly advance in more than a year. Wal-Mart Stores Inc.

Olive Kemp, 90, slowly stepped down the stairs toward the sales floor of the department store her family has owned since the 1920s. Her trusted deputy, Marta De La Hoya, 50, walked in careful lock step. Before them, the Christmas rush at the First Street Store in East Los Angeles was in full swing. Customers eagerly picked through dresses, undergarments and fabrics, through work pants and Levis. The store has served its working-class customers since 1924.

Don't worry if you haven't started your Christmas shopping yet. You'll have plenty of time to get it all done before Tuesday as long as you don't need to sleep. J.C. Penney Co. stores will be open until midnight Friday and Saturday. At Mervyns, you'll be able to keep buying until 2 a.m. all weekend, and the chain will throw in $10 gift cards for the first 200 people through the doors each day at 5 a.m. In case you have nothing else to do, Kmart will stage a nonstop 64-hour sale beginning at 6 a.

KARL LAGERFELD at H&M? Check. Proenza Schouler at Target? Check. Lela Rose at Payless Shoesource? Now, there's a head scratcher. Designers collaborating with mass-market retailers is nothing new, but some pairings are more surprising than others, and the dark horse in the race to win over the mainstream is the ubiquitous, help-yourself shoe store Payless Shoesource. Five seasons ago, Payless began with the first of its up-and-coming designer recruits, Abaeté.

FRUGAL designer junkies have been wading through racks of ill-fitting overstock at discount chains for years, hoping to chance upon a classic Burberry peacoat or pristine Stella McCartney sweater. Find one of those marked down to wholesale, and it's the thrill of stumbling upon a lost continent. Now T.J. Maxx is promising to make that kind of discovery routine. Last year, the company launched Runway, an in-store boutique advertised to stock exclusively high-end designer apparel.

A gunfight broke out at a Highland discount store and ended on the roof of a doughnut shop Monday afternoon after a Kansas City, Kan., murder suspect opened fire on sheriff's detectives, authorities said. Working on a tip from authorities in Kansas City, an elite unit of the San Bernardino County Sheriff's Department was searching for Tommy Mackey, 38, when they traced him to a vehicle parked outside a Super 99 Cent Plus store just before 1 p.m. Monday.

Wal-Mart Stores Inc. on Tuesday announced a deal to take over a big retailer operating in China by 2010, and a report out of Russia said the world's biggest retailer might also be looking at an acquisition there. Wal-Mart has struggled recently to increase sales in its home U.S. market, and emerging markets, like China, are seen as fertile areas for Western retailers to grow.