After the holiday sales are over and year-end earnings tallied, veterans of retail real estate brace for the first-quarter fallout. This is the time of year when retailers that didn’t hit their targets announce bankruptcies and store closings. It sets an immediate tone for the rest of the year.

By this prognostic tool, 2007 may turn out to be a good year.

“I don’t see any great vulnerabilities,” says George Whalin, founder of Retail Management Consultants, a San Marcos, Calif.-based firm that advises retail companies and suppliers. “I think the number of store closings [in 2007] will be a little less than last year.”

If so, 2007 will see the lowest number of store closings since ICSC began compiling data in 2001. Last year was the previous low with 4,073 closings. The first quarter typically accounts for 30 percent to 60 percent of annual store closings announcements. In five of the past six years more than 2,000 closings have been announced during the first quarter, topping at 3,892 in 2001.

So far, the biggest blow in 2007 has come from computer seller CompUSA, which announced Tuesday night that it will close more than half of its stores, shuttering 126 of the 229 outlets it operates in the 50 states and Puerto Rico. Meanwhile, Gap, Inc., has pulled the plug on the 19-unit Forth & Towne sub-division, after 18 months of trying to build a new brand for women 35 and older. Electronics retailer Circuit City has also announced plans to close 69 of its 653 locations, but only seven of those are in the United States.

And while analysts expect more store closing announcements in coming weeks, there is little concern about retailer bankruptcies this year, Whalin says. Private equity funds have been buying up troubled chains, such as Lord & Taylor, saving them from bankruptcy. In 2006, the volume of retail buyouts was more than $55 billion, according to Dealogic. The biggest deals included a $17.4 billion acquisition of supermarket operator Albertson’s Inc. by SuperValu, Inc., CVS Corp. and Cerberus Capital Management, and a $6 billion acquisition of Michaels Stores Inc. by Bain Capital Inc. and Blackstone Group LP.

“With the current fluidity of capital, many retailers are salvaged by being absorbed by investment firms,” says Stanley Eichelbaum, president of Marketing Developments, Inc., a Cincinnati, Ohio-based consulting firm.

The biggest concern for mall owners might be Gap, Inc., which has been struggling to improve its comparable sales figures since 2004. Shuttering Forth & Towne may only be the beginning of a massive repositioning effort, says Howard Davidowitz, chairman of New York-based retail consulting and investment banking firm Davidowitz & Associates, Inc. “I think they will close hundreds of stores this year,” he predicts. Gap has stores in virtually every major mall, with more than 2,600 locations in the United States.

With the housing market faltering, Eichelbaum is also watching for retrenchment among home-furnishings retailers. For example, Pier 1 Imports, which operates more than 1,200 locations, reported that comparable stores sales were down 13.7 percent in January, to $110.7 million, while year-to-date sales were down 10.2 percent, at $1.5 billion. For the year ended Feb. 25, comparable store sales declined 7.1 percent. “Lately, Pier 1 has been hit with the perfect storm of a sluggish home furnishings market, increased competition [from Target and Wal-Mart], and merchandising and marketing missteps,” writes Morningstar analyst Anthony Chukumba.

Another home décor chain, Bombay Company, Inc., posted a 15.5 percent drop in same-store sales in the third quarter of 2006, in its most recent financial report, with revenues of $108.2 million. Bombay operates about 500 locations throughout the United States and Canada.

Other potential trouble spots include electronics retailers RadioShack and Sharper Image and teen apparel chain Hot Topic, says Davidowitz. RadioShack, which operates 4,467 stores and 772 cell phone kiosks, closed 505 locations in 2006, but same-store sales in the fourth quarter of 2006 still fell 7.7 percent. Same-store sales at Sharper Image, meanwhile, decreased 25 percent in January. The company operates 187 locations.

Hot Topic posted a 6.6 percent slowdown in same-store sales in January, with net sales of $53.9 million. “The junior apparel category is doubly vulnerable,” says Eichelbaum—to the high level of competition in its market niche and the whims of its fickle clientele. The chain has 694 namesake stores and 131 Torrid locations.

-- Elaine Misonzhnik