Special Report: The Future of Retail

In style blogs and magazines, fashionistas have begun bandying about a new term: prepster. Is this merger between preppy and hipster the new style that retailers are rushing to embrace?

Consumers are still cautious about spending as the effects of the recession linger. But many retailers are feeling more optimistic as we head into the holiday shopping season. Here's a look at the people who are leading retail out of the doldrums.

Of course, retailers need to fight for every dollar. But the tactics they use to get customers to spend extra are clearly wearing thin. Our readers griped about nearly 350 sneaky ways stores aggravate them, especially when it comes to promotions, sales and discounts.

The renegade clothing maker and retailer led by the outrageous Dov Charney faces high-drama legal problems worthy of a daytime soap: sexual harassment suits, a wage-and-hour suit, immigration problems and shareholder suits. But federal probes into accounting issues could be the biggest threats to its existence.

Smartphones are shifting the balance of shopping power to consumers. Now there are applications for just about every aspect of shopping, from instant price comparisons to green ratings. Here's a quick roundup of some of the better offerings.

We started with Citi Investment Research's top global retail picks for an "hourglass" recovery (benefiting retailers on the high and low ends). After drilling down into the fundamentals and valuations, here are our five favorites.

Decent retail sales prompted businesses to restock shelves and warehouses, as inventories rose a better-than-expected 0.6% in August. Meanwhile, manufacturing activity in the New York area unexpectedly jumped in October, a positive sign for the struggling recovery.

Retail sales in September showed more of the same modest, mildly encouraging growth for the third month in a row, according to a Commerce Department report released Friday.

Sony Corp (SNE) forecast "very, very strong" holiday sales for its video-game consoles in Europe, with high demand for the PlayStation 3.

Andrew House, head of Sony Computer Entertainment Europe, said that European sales will help Sony exceed its target of selling 15 million PS3s in its fiscal year....

Gap's same-store sales will likely fall in its fiscal third quarter, which ends this month, CEO Glenn Murphy warned at an investor meeting in New York on Thursday.