Sun Capital sees tough holiday for retailers

By Chelsea Emery

NEW YORK (Reuters) - Retailers are facing a brutal holiday season which will challenge their ability to stay afloat as job losses rise and consumers slash spending, said Sun Capital Partners Inc managing director Gary Talarico on Tuesday.

"I think it's going to be the worst holiday season, certainly since 2002, but it could be worse. I think it's going be pretty bad," said Talarico at the Reuters Restructuring Summit in New York.

Sun Capital owns a range of retail and consumer companies including Hickory Farms, Bruegger's Bagels and Limited Stores.

"There are companies out there that might have enough liquidity to get through the (holiday) season and if they don't have a good season, they're not going to make it," he said.

Talarico said he expects unemployment to reach 7 percent, from 6.1 percent in August. He did not specify a time-frame.

"Job losses are very high," he said. "In the financial sector, the fallout there has hardly been felt yet and there's more to come. That has a huge spinoff in the economy."

(Editing by Phil Berlowitz)