Can retailers keep selling through the tough months ahead?

Across the board, from Saks Fifth Avenue to Target, retailers are projecting a very blue Christmas.

“I think this whole holiday season will be a litmus test for the retail sector,” said Dennis Kemp, general manager of Perimeter Mall.

Some retailers will be in trouble if they perform poorly over the holidays and liquidity remains tight going into the first quarter, he said.

“That’s a broad brush across the retail sector, no matter what you are selling or who you are,” Kemp said.

Best Buy Co., which operates 28 stores in Georgia, said Nov. 12 that falling consumer spending has resulted in lower than expected revenues. CEO Brad Anderson characterized this as “the most difficult climate we’ve ever seen.”

Electronics retailer Circuit City Stores Inc. didn’t even weather the holiday season, filing for Chapter 11 bankruptcy reorganization Nov. 10. It will close all 16 metro Atlanta locations.

Overall, Kemp expects mass discounters like Wal-Mart Stores Inc. and Target Corp. will do fairly well this holiday season, as shoppers look for bargains, but even discounters are nervous about holiday spending.

Minneapolis-based Target (NYSE: TGT), with 42 stores in metro Atlanta, reported Nov. 6 its October sales were down 0.7 percent to $4.4 billion.

“We expect the recent challenging sales environment to continue into the holiday season and beyond,” said Gregg Steinhafel, Target’s president and CEO, in a statement.

Haverty Furniture Companies Inc. reported Nov. 10 its total sales decreased 12.5 percent to $25.1 million in the third quarter.

Citing consumer spending downturns and financial turmoil, Atlanta-based Haverty’s (NYSE: HVT) reported it does “not anticipate a significant rebound in demand for the remainder of 2008 and well into 2009.”

Atlanta-based The Home Depot Inc. (NYSE: HD), with more than 40 stores in metro Atlanta, will announce third-quarter sales Nov. 18, but has already reported it believes fiscal 2008 sales will decline by 5 percent overall “given the continued softness in the housing and home improvement markets.”

Even luxury retailers Saks Inc. (NYSE: SKS), Nordstrom Inc. (NYSE: JWN) and Neiman Marcus are revising holiday sales expectations.

Neiman Marcus and Bergdorf Goodman reported October sales fell 27.6 percent. That prompted Burt Tansky, Dallas-based Neiman Marcus Group Inc. chairman and CEO, to “expect retail demand will remain weak for an extended period of time as our affluent customer reacts to the continuing volatility of the financial markets.”

Nordstrom’s October sales were off 15.5 percent. Saks reported a drop of 18.6 percent in October.