Once a huge contributor to children's apparel's total revenue, the holiday season isn't the guaranteed annuity it once was for merchants. Yet fashion, a return to "traditional" values and an added active twist have retailers encouraged.

In the mass market, kids merchandisers are positive on holiday. "Dressy sportswear will increase as opulence makes a comeback," says Michele Jasukaitis, spokeswoman for the Kmart fashion buyers.

"We are optimistic," concurs Sandy Sansavera, senior vice president and general merchandise manager at Ames. "While we have not put a number on it, our seasonal recap last year pointed to numerous areas for growth." In particular, he points to dressy sportswear: "We will be able to realize a nice increase in our girls' business."

This opinion is shared at mall-based kidswear retailer The Children's Place, where Mary Amicucci, merchandise manager, says her stores are committed to power presentations for holiday, with full-size ranges across all key items. Her overall outlook: Kids holiday business will be up. The 600-unit specialty chain itself is in the midst of an ambitious expansion, including its first entry into Canada.

Vendors, too, are optimistic.

Charles Becker, executive director of marketing and licensing at Millennium Apparel Group, believes that the fashion cycle is the all-important factor for 2002, and will carry through from back-to-school. "It will remain steady because the line between fall and holiday gets thinner and thinner due to fashion trends."

At Haddad Apparel Group, a key supplier to mass, the mid-tier and specialty chains, principal Sam Haddad reports, "retailers have a good outlook for the second half" of 2002, including holiday.

"We see the business up for holiday, especially in girls," remarks Nicole Pena, director of design and merchandising at French Toast, noting that many retailers are demanding "not-too-dressy sportswear."

This resource is responding with denim featuring ringspun, and color-sandblasted finishes.

These will be complemented with peasant tops set off by rouging, ribbons and bows, lace overlays and appliques, pin-on lace flower corsages and ruffles galore. Such tops also work with glitter-strewn bottoms of nylon, fleece and corduroy.

"V" stands for "victory" and for this holiday season that also can mean "velour," a sentiment to be supported in stores, ranging from Ames in the mass channel to The Children's Place in the specialty tier. Another vital tactic in holiday merchandising: Present and promote the outfit.

For dressy, Amicucci says, think picture-taking. "The key to dressy is the outfit, with issues, such as a nice sweater set in novelty yarn with a skirt." Keeping fashion in the forefront, Amicucci will carefully spice up the girls' sportswear mix.

The palette will center on traditional winter white, reds and blacks, set off by touches of navy and green; details range from velour and rhinestones to fur and animal-print trims.

"This is not 'uptight dressy' at all," says The Children's Place merchandise manager David Sillery, noting that a customer can choose to wear a khaki pant and sweater over a flannel shirt (poplin in warmer markets) or substitute a graphic T-shirt for a looser look. Alternately, 10 colors of turtleneck are offered. Twills and corduroy will complement the assortment.

"We will be very traditional, taking a calm, family-oriented approach to the dressy line," he observes, ticking off the color schemes of "red, navy, spruce green and rich browns, blacks and khakis."

Even with dressier looks catching on, volume will no doubt be greatest in the casual zone, where merchandisers plan to capitalize on holiday with more coordinated presentations. "It's not character, jeans or other licensed apparel, but generic dressing that can be layered to go either direction," suggests Sansavera. "We'll try to get the total concept across in store signing and marketing."

Shoppers at The Children's Place will be clued-in by color--yellows, oranges, bright blues in boys. In girls' casual, fashion will lead with "turk blue and fire red" setting off corduroys and novelty denims, says Amicucci. Tops will offer plenty of options, including zipper and triple-needle details, T-shirts with whimsical screens, more color latitude in sweaters, and monochrome or multicolor piping and taping on T-shirts and pants.

As usual, one source of childrenswear inspiration will be styles that trickle down.

Some of the newer treatments in denim that are sweeping through juniors' and young men's departments are providing a solid business in girls and boys, says Haddad. Ames is winning with this strategy, particularly in blasted denim for girls and sports-active influences for boys. The Children's Place is working fleece in a similar vein.

Sweaters also will be hot in kids, especially "the mock-neck, which will be a key silhouette," Sillery says.