Leasing News

The GSC website was down, the telephone did not answer, and confirmation of the company not being in business at this location was made by a spokesman

for the Santa Ana Police Department.

There are reports the principals have open a new “LLC” in Tustin, California.

If anyone has information to confirm or deny this event, please let us know.

Whether we should remove the complaint from the bulletin board appears

to be a mute point.

_______________________________________________________________

CapitalStream/WiredCapital Cuts 23 Employees

In the merger/acquisition of CapitalStream with WiredCapital, Director of Development John Kruse says, “The reorganization has been completed and resulted in a staff reduction of 23 employees across the board.”

In September, 2001 an announcement was made with Preferred Broker Solutions (PBS) (www.pbs4u.com) licensed to service System 1/Capital

Advantage, the program that originally introduced the company into the

equipment leasing industry

In its “hey day,” the Seattle based company had 130 employees, then announced

in 2001 a reduction to 90 employees; 2002, when the Stephen Campbell left the

company, it was reported to be 60 employees “as product had been developed. and

major cuts were made in the “sales force” and direction due to an effort

to go after major corporate accounts, rather than the “small” and “middle”

market place in the banking, finance, and leasing industry.

Thirty of the employees were reported to be “engineers” needed to write and maintain the software to service customer accounts.

According to John Kruse, CapitalStream had 56 employees and WiredCapital

23 employees, many working directly from their homes via the internet. In

speaking to one employee early Thursday morning, they were told there would

be no layoffs, but by late morning, this person had been given notice they

were laid off. The source did not want to be named to protect their

expected severance pay, but in talking to other colleagues, most of the

cuts came to WiredCapital employees.

One of the eLeasing companies Leasing News reported having financial difficulties was allegedly WiredCapital, where employees told us they were putting out feelers---but a June funding/investment was made, and payroll could be met. It was “nip and tuck,” we were told.

There are two other eLeasing companies also teetering, looking for a partner.

In July, 2001,CapitalStream and LeaseForum formed a “Strategic Alliance to Cross Promote Offerings--- Leveraging complementary offerings, the alliance enhances the technical and financial services available to

potential customers.”

The technology for banks, financial institutions and manufacturers, withwww.leaseforum.com), a Boston-based lease advisory and asset services firm., the press release said, “.... will promote each other's solutions and expand

their market base by joint-selling complementary products and services.

“CapitalStream delivers a suite of highly configurable browser-based

applications that link workflow, enterprise applications, and legacy

systems. ..by automating manual processes for leases, loans,

lines of credit, and credit cards. Simplifying the leasing process,

LeaseForum enables companies to dramatically reduce the all-in-cost

... proactively managing each stage of the leasing lifecycle.”

WiredCapital appears to have competing software with CapitalStream. The customer base and software seem to be the major assets. Their customers should be the winners of this “merger/acquisition” the principals state in their press release.

Kit Menkin, editor

www.wiredcapital.com

www.capitalstream.com

############## ###################################

Here is the full press release from CapitalStream

CapitalStream Announces the Strategic Acquisition of WiredCapital and Closes $10 million in Equity Financing

The acquisition is expected to result in increased financial strength, numerous operating efficiencies, and improved customer service, benefiting current customers and the Financial Services Industry

Seattle, WA - - CapitalStream (www.CapitalStream.com), a Seattle-based provider of business and commercial credit automation technology for the Financial Services Industry, today announced that it has acquired WiredCapital, a provider of enterprise automation software solutions for the Commercial Finance Industry, based in Orange County, California. The combined companies will continue operating under the CapitalStream name. Along with the acquisition, CapitalStream has raised an additional $10 million total in equity financing.

"This acquisition brings together the two best teams and the two best product lines in this industry," said Jeff Dirks, president and COO of CapitalStream. "Both companies have successfully built business and credit automation solutions for the Financial Services Industry, and our combined companies will bring together the skills, financial resources, industry expertise, and product offerings of two industry leaders to provide a 'one stop shop' offering banks and finance companies more choice and greater flexibility through a broader range of products and services."

This transaction provides significant benefits to CapitalStream, WiredCapital, and their respective customer bases. Both the CapitalStream and WiredCapital product lines will continue to be available to current and future customers to offer a choice in deployment. CapitalStream will continue to offer FinanceCenter™, the leading business and commercial credit automation service, as a hosted ASP solution while WiredFinanceä from WiredCapital will continue to provide an enterprise software solution that can be installed at customer sites behind their firewalls.

"With over 50% of the financial industry planning to implement front office automation solutions in the next two years according to our recent market research report, there is an enormous demand for our products and services, but the industry is still waiting for a leader to emerge from the many different solution providers," said Kevin Riegelsberger, WiredCapital's CEO. "Our two highly complementary organizations, combined with the incredible support of our investors, bring together the operational and financial strength that make CapitalStream the de facto industry leader and gives customers the confidence that we can meet their needs today and in the future."

CapitalStream will continue to conduct business from its Seattle office. As a result of the acquisition CapitalStream will receive an additional $10 million of equity funding from its current investors: FTVentures, Banc of America, Polaris Venture Partners, Voyager Capital, Merrill Lynch KECALP, Babcock & Brown, and The Benaroya Company. Also joining the investment round is Mobius Venture Capital, WiredCapital's venture capital partner. Mobius will take a seat on the CapitalStream board of directors along with CapitalStream's current board members.

About CapitalStream

Seattle-based CapitalStream delivers business and commercial credit automation solutions for the Financial Services Industry. CapitalStream's FinanceCenterä provides tools to better manage credit risk, reduce costs, and attract new business by automating manual processes for leases, loans, lines and cards. CapitalStream, an established industry leader, has helped hundreds of financial organizations increase their competitiveness, customer service, and profitability.

For more information visit www.CapitalStream.com

About WiredCapital

WiredCapital, based in Aliso Viejo, California, develops enterprise software solutions that enable commercial banks and finance companies to transform paper-based, stand-alone operations into integrated, streamlined finance supply chains. WiredFinance, WiredCapital's flagship software suite, enables seamless and paperless collaboration between customers, partners, and internal operations to rapidly originate loans, leases and other commercial finance instruments. WiredCapital integrates disparate systems, processes, and organizations to provide a single platform with a complete view of the customer relationship enabling financial institutions to be more responsive, efficient and competitive.

For more information visit www.wiredcapital.com

####################################### ################

eMarket Capital Becomes Captive Capital Corporation

Gets Series B Round Funding

Captive Capital Set to Continue Growth as

Outsourced Finance Program Management Company

(King of Prussia, PA- Captive Capital Corporation President and CEO Jonathan Moran announced his company’s name change from eMarket Capital, Inc. and that his Philadelphia area business had closed a Series B round of funding.

All of the company’s original backers, including major investor, Internet

Capital Group (NASDAQ:ICGE), participated; the total amount of funding was

not disclosed.

The name change to Captive Capital (www.captivecorp.com ), effective

immediately, better reflects the company’s business model to the vendor and

lender community.

"It has become clear that it is not just our Technology Platform that brings

value to our Partners, but the combination of technology, customer service,

our finance and leasing experience and the participation of our Lending

Partners," explained Moran.

Regarding the Series B financing, Moran stated: "We’re elated to have secured

financing from our original investors and our core employee group in this

rigorous capital market, which is especially tough for young companies. Our

operation continues to grow as new Vendor Partners join us each month."

Captive Capital helps its vendors’ customers fund transactions in the $5,000

to $5 million range, which make up over 50 percent of the over $240 billion a

year leasing market.

"Construction, machine tool, industrial manufacturing, healthcare and

technology are among the industries that hundreds of thousands of companies

will acquire equipment through lease financing this year," said Moran.

"These deals are best suited to the service we offer."

Captive Capital creates, hosts and manages private-label finance and leasing

programs for equipment manufacturers and distributors. This outsourced

service uses a patent pending process to match prospective borrowers with

lenders willing to meet their financing and leasing requirements by offering

competitively priced financing plans. Captive Capital partners with

equipment manufacturers and manages their in-house finance programs for them,

while lenders get access to pre-qualified borrowers, decreasing their

origination costs.

To begin the process, customers are directed to the manufacturer's web site

or complete an application that can be faxed. The program is designed as a

co-branded service which gives the appearance that the vendor is providing

the financing directly. Customers provide their credit information and

capital needs to Captive Capital through a secure browser or via fax.

Captive Capital scores a prospective borrower’s requirements and delivers to

the appropriate lender potential deals that fit that particular lender’s

credit and collateral preferences. Lenders reply with an offer of credit;

the deal is completed and the manufacturer is paid.

Captive Capital offers customers:

---- the ability to apply for a lease in under five minutes

--- access to competitive financing based on their individual credit strength

--- customer service from application submission through funding

For more information about Captive Capital, visit www.captivecorp.com or call

800-994-4369.

############ ################################

The MMIC Group Expands Leasing Services To Physicians and Hospitals

MINNEAPOLIS--(BUSINESS WIRE)--Oct. 10, 2002--The MMIC Group recently signed an agreement with Creekridge Capital, LLC, an asset leasing company, to expand the tailored and customized leasing services MMIC offers physicians, clinics and hospitals.

MMIC's original agreement with Creekridge allowed physicians to use the leasing services when purchasing practice management or electronic medical records systems. Under the new agreement, physicians and hospitals can use the services for all their leasing needs.

"Our partnership with Creekridge will help physicians and hospitals invest in needed assets without exhausting their capital," says David Bounk, CEO and president of the MMIC Group. "Creekridge is a good alternative to bank financing."

The new leasing service can be access by contacting Creekridge Capital or through MMIC's medical portal at www.mmicmedportal.com. By going through the Medportal, healthcare providers will receive a two-month lease payment deferral.

Creekridge's Vice President Jeff Cowan says, "With our extensive healthcare leasing experience, we have been able to create flexible and competitive programs for physician groups, clinics and hospitals across the country to help them preserve cash, take advantage of the tax benefits inherent in a lease and better manage their balance sheet as they acquire the use of technology."

Located in Minneapolis, Minn., The MMIC Group provides medical malpractice insurance, employee benefits consulting and a range of technology, information management tools and related products and services to independent physicians, clinics and health systems in the Midwest. Additional information about The MMIC Group can be found at www.midmedical.com, or go to www.mmicmedportal.com to learn more about its technology products and services for healthcare providers.

Creekridge Capital, LLC, is a leading provider of technology financing to the healthcare industry. Creekridge offers finance programs for an extensive range of technology and general medical-related equipment, furniture and software. The company funds Fair Market Value Leases, Tax-Oriented Operating Leases, fixed buy-out provisions and lease lines of credit. Their financing programs include provisions for equipment upgrades and enhancements, equipment trade-ins, multiple location billing and payment plans developed around budget requirements.

CONTACT:

MMIC, Minneapolis

Rosalind Miller, 952/838-6778

rosalind.miller@mmihc.com

Creekridge Capital, LLC

Jeff Cowan, 952/826-7868

jcowan@creekridgecapital.com

-------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------

Orix Don Cox Gone

Don Cox ,CFO in Atlanta for the ORIX Financial Services division, was

allegedly let go. He reported directly to Jay Holmes.

Anyone who can confirm or get denial on this, or more to the story,

“on” or “off the record,” please let us know. We keep all information

in strict confidence.

_______________________________________________________________

CIT Group---Long Term Investors Like This Company

Last trade of CIT stock was at $15.50. appearing to be a significant drop from their original average of $23.00 a share in July of this year.
too)..

http://table.finance.yahoo.com/k?s=cit&g=d

CIT Group Inc. is a commercial and consumer finance company that provides a wide range of financing and leasing products, according to the Yahoo

Financial Profile. For the comparable nine months ended 6/30/02, revenues fell 13% to $4.05 billion. Net loss totaled $6.11 billion vs. an income of $312.6 million. Results reflect lower interest rates, reduced rentals in the aerospace portfolio, $335 million in credit provisions for the telecommunications industry and Argentina and $6.51 billion in goodwill impairments

It appears the Yahoo message board likes the company, and views the stock

as a “long term” buy, not concerned about today’s price:

"I agree with your conclusion that a long position is appropriate, but if anything your valuation is conservative.

"Remember that past due loans are a part of the business. Not only do they know how to collect them, they also take partial write downs on those that look to be big problems. So the past-due balance you're deducting has already been written down to what the collectors think they'll realize.

"Discount it somewhat for the collectors' optimism if you like, but deducting the entire past-due balance to determine valuation is too aggressive.

"I put the IPO price of $23 as a bare minimum current valuation, and I think there's an excellent potential for longer-term growth beyond that.

"That's why I'm long at $23 and picking up a bit more."

_________________________________________________________________

Is Fleet Beat?

by Mark Bruno

US Banker Magazine

Fleet Execs Have been adamant that they won’t be running a “for sale” sign up the flagpole. They say they are committed to getting the company through its recent troubles—everything from heavy loan exposure in Latin America to the shuttering of its Robertson Stephens boutique when it failed to strike a deal with a buyer—without having to sell the firm.

But bank analysts say Fleet, the seventh largest bank in the country, might have as little as one year to turn its enormous bulk around before acquisition rumors becomes reality. “Realistically, they probably have a year before the shareholders will revolt,” says Mark Fitzgibbon, an analyst and principal who covers Fleet for Sandler O’Neill. The stock, which plummeted into the high teens last month and has settled into the low $20s range, was still above $30 as recently as July.

If Fleet can’t get in shape, which Fitzgibbon puts at about 50-50, he and other analysts say Citigroup, HSBC, Wells Fargo and Wachovia will be drooling to buy the bank, which holds a large chunk of the Northeast, one of the nation’s wealthiest regions.

While Bank of America and Bank One have also been mentioned as potential buyers, Citi and HSBC are the early-on favorites. Jim Moss, a managing director at Fitch Rating who covers Citi, says if Fleet can’t get rid of the “black cloud of Argentina and Brazil hanging over it,” or if it sheds some risky businesses but still can’t turn the corner, Citi will be there eagerly waiting to make a bid for the franchise. “New England’s a logical extension of Citi’s footprint,” says Moss. “And if anyone has the money for Fleet, it’s Citi.”

But there would be challenges for Citi, Moss points out. It would have unprecedented regulatory hurdles to jump—even under the Bush Administration. How big will Citi be allowed to grow? Plus Citi, or any U.S. suitor for that matter, could be going up against some formidable international competitors: HSBC, Royal Bank of Scotland and Deutsche Bank—though most analysts say HSBC is the foreign bank most likely to make a serious bid.

Dion Darham, an analyst covering HSBC for Arnhold and S. Bleichroeder, says the London-based banking company is “very interested in expanding its presence in NAFTA countries.” He says HSBC’s late-August acquisition of Grupo Financiero Bital, one of Mexico’s largest banks, is evidence it wants a greater footprint in North America—and the deal may only be an appetizer for a hungry HSBC. “They have such a huge global business, and in some Asian cities, like Hong Kong, they are basically the consumer bank of default,” says Darham. “They have so many deposits they can really almost acquire as they please.”

With so many major players interested in Fleet, an auction may have to be held to sell the company. According to Y-Merge, an SNL Financial tool that estimates what a firm can pay to buy another in an all-stock transaction, Fitzgibbon says Wells Fargo could currently bid the most, an estimated $40 per share for Fleet.

Whether Wells is interested is another story. “I asked Dick Kovacevich point-blank if Wells would be interested in Fleet and he said they would be,” says Sandler O’Neill analyst John Kline. “He also said it’d be a low probability because others would covet Fleet more.”

Jason Goldberg, an equity analyst at Lehman Brothers, says Wells has been a successful buyer in the past, but the San Francisco-based bank is too disciplined to overpay for any franchise, including Fleet.

A more likely candidate, Goldberg says, is the Charlotte-based Wachovia. “A year from now, if they can complete the First Union merger cleanly and successfully, they’d probably have the ability to do another acquisition,” says Goldberg. “If they can do that, then they’ve proven to the Street they know what they’re doing. So I wouldn’t rule Wachovia out either.”

---------------------------------------------------------------------------------------------------

Small Business Banking Goes Global

Why banks around the world are focusing on this segment.

FINANCIAL INSTITUTIONS CONSULTING, INC.

475 Fifth Avenue, 19th Floor

New York, NY 10017

212-252-6700

www.ficinc.com

=====================================================

During the past 12 months, FIC has completed small business related projects

or seminars in Bangladesh, China, Russia, India, Mexico, Nigeria, and the

EU. The heightened focus on this segment is apparent, not only from our

international work, but also from multiple business magazine and newspaper

articles that highlight this segment's attractiveness.

Last month, THE ECONOMIST published an article in its survey of Central

Europe titled, "Back to Nursery School: Small Business Is At Last Beginning

To Get The Attention It Deserves." Its final paragraph effectively

summarizes the article's focus: "In the 1990s many international banks were

trying to reduce their loan books and concentrate on fee income from

corporate finance and the more affluent clients. Now some have decided that

they were wrong to neglect retail and small-business lending."

In a number of the countries where we have worked, we have found that small

business is not in fact a "new" area of focus. In many instances, this

market had been an earlier focus that had been managed unsuccessfully. In

some cases, an expensive corporate banking approach was pursued for what is

clearly more of a retail segment. Credit quality has also been a past issue.

Lacking the type of information and scoring sophistication that exists in

the U.S., some banks made bad lending decisions. Management came to realize

that it was their process and not the market segment that was the reason for

failure.

This week's newsletter focuses on describing some of the factors influencing

the international focus on SMEs. Next week our newsletter centers on

recommending approaches for banks entering a market that, while among the

most attractive, can also be treacherous to profitability.

WHY THE CURRENT EMPHASIS ON SMEs?

Our work, both in the developed and developing worlds outside the U.S.

indicate that four key factors lead to a new or renewed SME focus:

- Decreased corporate opportunities

- Increased governmental push

- Improved understanding of retail profitability

- Improved circumstances for future success

1. DECREASED CORPORATE OPPORTUNITIES. As in the U.S., foreign banks are

experiencing the same lackluster results from large corporate customers.

Larger companies haggle over pricing, play banks off one another, and

frequently disintermediate the banks by going directly to the investor

community. Even in this increasingly difficult environment, at least some of

the non-U.S. banks (as well as some U.S. banks) we have worked with would

just as soon remain focused on the corporate market, but senior managements

realize that they need to look elsewhere for growth.

European Bank for Reconstruction and Development (EBRD) statistics also

indicate that micro- and small-business lending can be done safely. The same

ECONOMIST article presents a chart listing borrower arrears in seven Central

European countries. With the exception of Albania (3.44%), other countries

generate 30+ day arrears of less than one percent.

2. INCREASED GOVERNMENTAL PUSH. In many instances, at least part of the

"new" emphasis on small business comes from the government. Just as the U.S.

has the Community Reinvestment Act (CRA) promoting small business

involvement by banks, so too do many other nations have guarantee or

investment programs in place. For example, in Nigeria, banks must invest 10%

of pre-tax profit in small business ventures. This has promoted the creation

of firms that specialize in making and managing these investments for the

banks. Other countries have quasi-guarantee programs like the U.S.'s SBA

program.

3. IMPROVED UNDERSTANDING OF RETAIL PROFITABILITY. Our view has long been

that one of the key factors igniting U.S. bank interest in small business

has been senior management's increased understanding of retail

profitability. Small business can contribute 30%+ of retail bank profits.

While that number is not as high in developing countries, sophisticated

managers are beginning to see the potential of this segment and also

understand the value of business deposits.

4. IMPROVED CIRCUMSTANCES FOR FUTURE SUCCESS. Typically, one question that

we ask banks that had previously entered and then existed the SME market is,

"What's different now?" In other words, why will the bank be able to succeed

in the future while having failed in the past? The answers we like to hear

(because they indicate that bank management "gets it") include: "We are

viewing it as a retail business;" "The branch system will be onboard;"

"Senior management is committed and shows it." While none of the comments

guaranty success without effective execution, they do indicate that a

changed mindset is in place.

GOING FORWARD

Of course, there can be a wide gap between stating an intention to enter or

reenter the small business market and doing so effectively. Banks need to

confront a number of organization, risk, and sales-related issues, among

others, in order to penetrate this segment effectively. Next week, we will

focus on these issues.

======================================================

FIC NOW OFFERS A ONE-DAY SEMINAR/BRAINSTORMING SESSION ON STRATEGIES OF

BUSINESS BANKING. This workshop, specifically tailored to address your

bank's needs, focuses on the issues and topics of critical importance to

small business bankers, including: customer's needs and desires, customer

profitability and retention, segmentation, cross-sell, deposit gathering,

and priorities for success. For more information, click on the link below

or e-mail mharvey@ficinc.com

http://www.ficinc.com/Workshop/biz_banking_workshop.htm

=====================================================

NOW AVAILABLE FOR ONLY $500: 2001 SMALL BUSINESS STATE OF THE MARKET

REPORT - a comprehensive study of the small business market and its use of

financial services products and providers. By joining the perspective of

over 400 small business owners with FIC's extensive knowledge of the small

business market and financial services industry, the report looks at market

size, use of products, product providers, credit cards, credit, primary

providers, delivery channels, online banking, and segmentation. For more

information or to purchase, e-mail: mharvey@ficinc.com.

=====================================================

ABOUT FINANCIAL INSTITUTIONS CONSULTING

FIC is a strategy consulting firm addressing issues related to growth and

profitability for financial services clients. We emphasize practical,

bottom-line results based on quantitative and qualitative research and an

in-depth understanding of industry dynamics.

For more information about our consulting services or if you have questions

or comments, please e-mail: info@ficinc.com; type "info" in the subject

line.

Equipment Leasing Association San Francisco Columbus Day Conference

ELT's E-Leasing Newsletter will be sent to all ELA members twice next week, directly from the ELA Annual Convention in San Francisco. Special editions on Tuesday and Wednesday mornings will bring you the news and highlights, along with links to photos, from the premier leasing industry event.

Leasing News hopes to receive reports from our

ace correspondent Jeff Taylor, Executive-Caliber, educator-trainer, specialist

in lease account, who has his own newsletter.

If you didn’t have the time for the conference, or didn’t want to outlay the

registration, hotel, airline costs, we’ll have the highlights. It will never

cover all, including the networking available, but can get an idea of

what you missed.

While mail registrations are closed, walk-in registrations at the hotel

will be accepted. Please go to the above link to learn more. Hello Kit:

---------------------------------------------------------------------------------------

Business Leasing News Latest Edition

Just to keep you up to date, the October edition of Business Leasing News

(BLN) just launched and is available at

http://www.pblaw.com/newsletters/bln.

This issue contains articles about mezzanine financing, asset-based lending,

the FASB Off-Balance Sheet Saga and much more.

As you now know, the BLN web site now has search

engine and a subscribe feature to allow readers and new visitors

to subscribe to the direct e-mail of BLN each month

and to search any of BLN's articles. I have received

some great feedback from your readers

and very much appreciate their interest and yours.

Keep up the good work on your reporting. I will be back in touch after the

ELA National Convention where I will be speaking on the new FASB Off-Balance Sheet stuff and international leasing opportunities.

All the best,

David

David G. Mayer

Patton Boggs LLP

2001 Ross Avenue

Suite 3000

Dallas, Texas 75201

Tel: (214) 758-1545

Fax: (214) 758-1550

Author of: Business Leasing For Dummies

Publisher of: Business Leasing News

__________________________________________________________________

Shoppers Take a Holiday

By TRACIE ROZHON

New York Times

The country's largest retailers reported September sales so dismal that they were only slightly better than sales a year before, when many shoppers stayed away from stores after the Sept. 11 terrorist attacks.

The results reported yesterday further worried an industry looking warily toward a holiday shopping season, with consumers already troubled by a falling stock market, weak job prospects and the possibility of a war with Iraq.

"Christmas is looking bleak," said Ben Johnson, the editor of Shopping Center World, a trade newsletter published by Primedia. "Back-to-school was disappointing to say the least, and now the September figures show the darlings like Target and Kohl's are down. They were like the rocks."

Sales at stores open at least a year were up just 1.2 percent from last September, according to the Goldman, Sachs retail composite measure. Discounters were up 3.1 percent, while department stores were down 3 percent.

One analyst after another sounded like Scrooge, pointing to evidence that retailers have already begun to expect the worst through the end of the year. Some Christmas decorations are already on sale, for example, and blue jeans, once best sellers, are being marked down in many places, they said.

Worst of all, no runaway toy success is in sight, the kind of must-have product that leads to televised tales of long lines or encourages parents to pay scalpers to find that perfect gift for their children. "There's no Razor scooter or Furby or Cabbage Patch coming out," said Russell Jones, vi

ce president for retail consulting at Cap Gemini Ernst & Young.

The holiday season, when the toy industry in particular generates a big portion of its sales, is now "a big question mark," said Thomas P. Conley, president of the Toy Industry Association, even though earlier this year the industry had predicted a 4 to 6 percent increase from last year.

More broadly, while many retail experts blamed the softening economy in general, Britt Beemer, chairman of America's Research, said a lot of consumers were just plain bored with the merchandise.

"Seventy-three percent of those surveyed said there was no real difference between Store A and Store B," he said.

One reason for the weak showing at shopping malls is that many consumers may be tapped out from buying big items like cars and houses.

The September results were particularly disappointing because many experts had thought the month would be an easy big score because of the comparison with the dismal results the previous September.

Now, despite an economy that is no longer in recession, many analysts are saying the gains for the holiday shopping season may turn out to be lower than last year's.

Michael Niemira, an economist with the Bank of Toyko Mitsubishi, said the risks for retail — sales and earnings — are "all on the downside." He listed two possibilities: "If by some miracle, the war tensions wane, the best you'll do is a 3.75 percent rise over last year," he said; but if a war breaks out in Iraq before the end of the year and there are consequences like higher oil prices, he said, holiday sales figures could be gruesome.

"Given what we've seen in the last two months, it's an absolutely pessimistic picture," Mr. Niemira said. The economist mentioned a particularly alarming survey of retail executives done by the National Retail Federation. `'The September numbers make it even worse," he said.

By the 79-store index compiled by Mr. Niemira's Bank of Tokyo-Mitsubishi, sales at chain stores in September rose about 1.5 percent — compared with 0.9 percent a year ago. It was the smallest gain reported since the attacks. The department stores did the worst, with apparel sellers second.

Even some never-fail favorites of shoppers have stumbled. Sales at store opened al least a year at Kohl's, for example, dropped 3.2 percent after a year of double-digit increases.

Similar sales at J. C. Penney, which rose 8.1 percent in September 2001, fell 3.1 percent last month. Target, another success story, fell slightly. Wal-Mart Stores, the country's largest retailer, rose 3.3 percent, but that was well below the company's initial projections, and at the low end of it

s revised estimates.

There were a handful of sunny stories, but they were rare amid the general gloom. The Limited gained 6 percent, and Neiman Marcus was up 18.7 percent.

Todd D. Slater, who covers the retail industry for Lazard, said long-term averages continued to deteriorate. "Mall traffic is way off," he said.

What of September's hot weather, which several stores blamed for the poor showing of autumn and winter wools?

"Don't blame the weather," said Mr. Slater, who produced charts to show the temperatures from New York to Los Angeles were, on average, only 1 to 3 percent higher than in September 2001.

According to Chuck Hill, director of research for Thomson First Call, 9 of 18 apparel companies have now warned that they will miss their earlier estimates for the third quarter. Many had already been revised downward.

Because of the weak September numbers, some retailers are reconsidering their fourth-quarter projections. Yesterday afternoon, Gap, which has been on a long downward trend, projected that per-share earnings for the fourth quarter would be 2 to 7 cents below earlier expectations, largely because of

the extra transportation rerouting expenses and the lost sales connected with the West Coast port shutdown. B. J.'s Wholesale Club also predicted earnings for the fourth quarter would be less than originally expected.

Many of the worst showings were at companies that specialize in apparel for teenagers — only a while ago the great hope of the clothing business. But yesterday's numbers for Abercrombie & Fitch, American Eagle Outfitters and Wet Seal were dispiriting.

Still, some analysts, pointing to the fact that American Eagle's shares were up yesterday, said the worst might be over for some retailers.

"The fact the stock goes up on bad numbers indicates that we're close to the bottom," Mr. Slater said. "Because the bad news is not as bad as the stock prices."

Lazard is taking a neutral stance on buying retail stocks. Mr. Slater, who predicted yesterday that November "could get pretty ugly," said that then might be the time to buy. "The only time to buy is when you're in the belly, suffering the max pain," he said.

Despite the dim outlook, a few special items sparked interest among those affluent buyers who have not suffered too much from the decline in stocks.

"We mailed our Christmas catalog in early September," said Bob Friedland, a spokesman for F. A. O. Schwarz. "And some of the things are already sold out."

What's sold out?

"Several one-of-a-kind things," Mr. Friedland said. "Two of our one-of-a-kind Barbies, for $8,000 apiece, have gone."

But that's only two dolls.

"It's really too early to tell," he replied. `'We'll know more after Thanksgiving."

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