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It's a make-it or break it time for retailers. The holiday selling season is always a critical time for retailers, but this year this may be even more true. With several retailers already falling victim to a drop in consumer spending, and filing for bankruptcy, retailers will be navigating through some tricky waters. Consumers are strapped for cash due to high energy and food prices, and unemployment is rising. The recent credit crunch has made it more challenging for retailers and consumers to borrow.

This blog will look at the winners and losers in the retail space. Who has the right strategy to capture consumer dollars? It also will look for trends in consumer spending and how that will impact the economy.

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Lululemon Finds "Mantra" In A Niche Market

Published: Wednesday, 2 Apr 2008 | 1:09 PM ET

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By: Margaret Brennan
CNBC Reporter

Revenge is bittersweet for Lululemon Athletica [LULU Loading... () ] . Short interest in the stock is at 21 percent of the float right now and today's rally may have something to do with short covering.

That said, investors who subscribe to Credit Suisse analyst Paul Lejeuz's thinking (his rating is outperform) would say that this yoga wear company has earned the right to a rally.

Understanding Lululemon's fourth quarter earnings success requires walking into a store and seeing their product firsthand. I wouldn't expect relatively expensive workout clothes (average ticket is $100) to be able to sell during this consumer slowdown. The consumers' hesitation or inability to spend on discretionary items is a problem for many stores out there.

But Lululemon managed to post fourth quarter earnings of 21 cents per share (versus the 19 cents per share that Wall Street expected) up from just a penny a share during the same quarter last year.