U.S. retail: Attention, shoppers!

This holiday season is none too festive.

The day after American Thanksgiving is called Black Friday. It’s the unofficial start of the U.S. Christmas season, and often the busiest shopping day of the year. This Nov. 28 might be called Bleak Friday. All signs point to one of the worst retail seasons in the U.S. since the mid-1970s. Department and specialty stores posted steep declines in year-over-year sales in October. Bankruptcy filings and closures abound: Saks Inc. (NYSE: SKS) is shutting its 98-store tween fashion chain, Club Libby Lu, while Circuit City (NYSE: CC) has filed for Chapter 11 protection. Linens ’N Things went straight to liquidation. Others have followed, rather than build up Christmas cash and try to restructure in January. “It’s going to get ugly,” says Chicago-based retail consultant James Dion. “I’m predicting we’ll see by January literally thousands of retail bankruptcies.”

Big sales have started weeks earlier than usual. Dion walked into a BCBG Max Azria store on Chicago’s Magnificent Mile in late October to find everything was 30% off; at nearby Kenneth Cole (NYSE: KCP), the markdown was 25%. “I was in shock,” he says. “These are acts of despair.” Things are tough for mall owners, too. Shares of General Growth Properties Inc. (NYSE: GGP), with more than 200 malls, have fallen more than 90% since summer. It has replaced its CEO, suspended dividends and is looking to sell assets and refinance $900 million in debt. In this climate? Good luck. “I think we’re going to see a lot of the companies that are stretched have a tough time getting through this,” says Jim Okamura, a partner with retail consultancy J. C. Williams Group in Chicago. Canadians are in better shape financially and generally haven’t spent themselves silly with borrowed money. But with consumer confidence down sharply here too, says Dion, “the big job of Canadian retailers is convincing shoppers this isn’t America.”