Christmas Present

By Sora Song and Deirdre van Dyk

Briefly, deliriously, it seemed like old times, as a surprisingly hearty ka-ching kicked off the holiday shopping season. But unlike those of Christmases past, this boom was driven by deep discounts and a spate of patriotic buying--just two signs of how the shadow of Sept. 11 and a bad economy are altering this year's Yuletide.

--By Sora Song and Deirdre van Dyk

SPIRITUALITY Houses of worship have already seen attendance rise as much as 10%, but God is also in Aisle 2: Bibles have been moving off shelves in record numbers, and at Neiman Marcus, top-selling necklaces include a cross pendant, above, and a gold-and-diamond horseshoe, for good luck.

THE OFFICE PARTY Partying like it's 1999? No one else is. One study says firms will spend 15%-75% less this year on holiday affairs, as once lavish fetes are drastically downscaled (example: at Estee Lauder, talk of holding potluck lunches) or money once spent on celebration goes to charity. One sign of revelry in reverse: champagne makers fear holiday sales may be as flat as day-old Cristal.

AT THE STORES Outside, windows reflect a new mood, above; inside, it's a buyer's market as some chains quietly allow haggling, stores increase sale goods 15% and one Manhattan boutique offers free massage. Even chilly Bergdorf Goodman is playing to whim--and wallet--with free drinks, TVs airing sports and its first ever Santa Claus.

GIFTS Silk quilts, candles, karaoke machines. What do they have in common? They're "cocooning" gifts, which retailers expect will satisfy the post-Sept. 11 craving for comfort and, yes, quality family time. Sales of DVD players, this year's hottest stay-at-home splurge, have already surged nearly 50% over last year.

TOYS Beyond the Xbox, it's a time for throw-backs, as kids turn to GI Joe, old-fashioned rescue heroes (Fisher-Price's fire-fighting Billy Blazes, right), even '70s-era color-and-bake plastic Shrinky Dinks (nostalgia appeals to baby boomers). One sign of patriotic times? Kay-Bee Toys reports an unexpected best-seller: an interactive quiz game on U.S. Presidents.