County merchants are reporting better-than-expected holiday sales this month and say they could make up for a disappointing year.

The reports are surprising retailers, who looked at the recession and expected the worst this holiday season. Many say they are doing just as well as in 1990, and a few say they're doing better.

At The Icing, an upscale accessory and jewelry store at The Mall in Columbia, business so far has topped that of last year, said manager Nancy Thomas.

"Because the economy's been down, we've reacted to it by running promotions all the time," she said. The store now hassales weekly instead of monthly and has started offering 25-percent discounts on clothing.

The Icing's success is shared by most mall stores, said Danielle Morgenthaler, the mall's sales and marketing manager.

Last year's holiday sales volume was the highest ever for the mall, she said, although she declined to release numbers. Sales this year are running "neck-and-neck" with last year's figures, Morgenthaler said.

Mall management is combating the recession by expanding its radio and print advertising and offering special promotions to shoppers. Shoppers who spend $75 or more, for example, get a chance to buy a $100 USAir discount coupon for $4.95.

In Ellicott City's Main Street shopping district last weekend, merchants enjoyed packed stores during the Ellicott City Business Association's annual "Midnight Madness" shopping promotion.

"I actually did better than I did last year, which was surprising," said Cheryl Argent, who sells handcrafted American Indian art at her store, Concatenations, on Main Street. "Because of the economy, I was expecting to break even," she said.

Business Association president George Chambers estimated that theDec. 6 Midnight Madness attracted as many as 10,000 people -- about 1,000 more than last year -- with free entertainment, food and drink,as well as audiences with Santa and County Executive Charles I. Ecker.

Argent said that during one three-hour period there were never less than 15 customers in her store. "And there was a lot of purchasing going on -- it wasn't people just browsing."

"I've talked to several merchants who tell me they're doing really well," said Kathy Chambers, a business association board member and co-owner of Suitable Shirts.

Overall, however, this year has not been kind to the county's retailers.

Sales taxes collected through November 1991 indicate a 3.4 percent drop from 1990 sales for Howard County. Last year marked the start of a retail slowdown.

Several businesses in historicEllicott City started in the spring, when the recession reached new lows, and failed to dig themselves out.

Two doors up from Concatenations is an empty storefront that housed a gourmet shop until it went out of business recently. It was among two businesses on Main Street to go under in November.

Kathy Chambers said that at least 12 businesses failed or moved away in the past year, and only seven have moved into their spaces.

Staying even with last year is fine with William P. Connell, owner of Connell Jewelry in The Mall in Columbia. Although his sales for the year are ahead of 1990 -- his best year ever -- this month, he is running behind last December's figures.

"If I was doing the same as I was last year, you're going to see the happiest man in the world," he said.

One regular customer who used to spend $1,000 on jewelry now limits himself to items in the $700-$800 price range, said Connell. A nice sparkler used to prompt customersto stretch their purchases by a couple hundred dollars, but "this year, people are sticking more to their budgets," he said.

Morgenthaler sees good news for the rest of the month, however. Even though the mall's sales are already doing well, he said, "We haven't seen the bulk of what we are going to see. I think the next two weeks are going to be crazy."

Warm weather has lulled many shoppers into the feeling that the holidays are still in the not-so-immediate future. The first dose of snow or arctic air will send them running to get gifts,she predicted.

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