NEW YORK (CNN/Money) - Upscale retailers Saks and Neiman Marcus, and gadget merchants Best Buy and Sharper Image are grabbing the big consumer dollars this holiday season as shoppers splurge on both pricey gifts and the latest digital gizmos.

Luxury retailers are sitting pretty about halfway through the crucial shopping period because a stronger stock market, tax breaks over the summer and the mortgage refinancing trend have added more wealth to the wallet.

Shoppers are picking up pricey gifts like this $295 Burberry signature check cuff.

"High-end stores depend on continued spending from clients that over the past four years have amassed considerable wealth," said Kurt Barnard, an independent retail consultant. "Sales at upscale stores like Saks and Neiman Marcus are also going strong because the stock market has been very customer friendly to this group."

Meanwhile, analysts say it's easy to figure out what's fueling the love affair with tech purveyors: the lack of a "must-have" item this year makes gadgets and gizmos a convenient back-up gift.

"There's a big variety of products for shoppers to choose from and the prices are very competitive," said Britt Beemer, senior analyst with America's Research Group.

Discounters and department stores, however, are struggling to feel the Yuletide cheer.

Here's the rundown on the winners as Christmas inches closer:

La vida loca: Prada shoes, Emilio Pucci scarves and Fendi bags don't come cheap. Flip the pricetag over and you'll typically find a triple-digit figure. But the luxury sector posted solid November comparable sales numbers, the best among retailers.

Saks (SKS: Research, Estimates), which operates luxury retailer Saks Fifth Avenue, logged a 6.7 percent gain. Neiman Marcus (NMG.A: Research, Estimates), whose Christmas catalog of fantasy gifts this year featured a $10,000 mermaid suit, reported a 5.8 percent gain, while Nordstrom (JWN: Research, Estimates)'s sales rose 7.4 percent. All three companies beat Wall Street's expectations.

Colorful Prada bags, $250 each, add a festive touch this season

"Prices are much firmer in the high-end product arena than in the moderate price discount arena," said Richard Hastings, chief retail economist wth Bernard Sands. Hastings thinks it's a sustainable trend that's likely to benefit upscale retailers well into next year.

"We're living in a 'makeover' economy where the cyclical demand for beauty needs is at a new level. This has made personal appearance become the Home Depot of the human body,' Hastings said. "This is boosting demand for accessories, bags, shoes, and personal care items."

Gearing up for the holidays: Shoppers nationwide are taking advantage of the best holiday deals at consumer electronics stores, stocking up on items such as $20 DVD players, $130 camcorders, or personal computers for $500 or less.

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In some case, retailers are already reporting shortages in supplies of large screen TVs, particularly rear projection "flat screen" plasma and LCD (liquid crystal display) sets, according to a recent report by industry publication This Week in Consumer Electronics (TWICE).

Among the best performers are Best Buy (BBY: Research, Estimates), the No.1 electronics retailer, and Sharper Image (SHRP: Research, Estimates), which logged a 8 percent sales increase last month for goods such as a the iJoy massage chair, digital cameras, electric nose-hair trimmers and air purifiers.

"This sector saw about a 4 percent growth last year. I expect it to do about the same, between 3 to 4 percent this year," said Frank Badillo, senior economist with Retail Forward.

The online revolution rumbles on: Web merchants got a stellar start this year after Thanksgiving weekend salesjumped 25 percent over the same period last year. Online sales also benefited from early winter storms that kept people at home during a critical shopping weekend.

Some analysts expect total online retail spending in 2003 could be 30 percent higher, to about $12.6 billion. "People are increasingly using the Internet for easy price comparisons. Also, the reliability of delivery of a product bought over the Internet has increased," said Gian Fulgoni, chairman of comScore Networks.

Discounters and department stores: Both made a tepid start to the shopping period. Even early doorbuster discounts didn't work the magic on shoppers. Kohl's (KSS: Research, Estimates) and May Department Stores (MAY: Research, Estimates), owner of Lord & Taylor's and Filene's, fared the worst among the department stores.

"It wasn't a blowout month for this group," said Ken Perkins, analyst with Thomson Financial. Nevertheless, some suspect that the blast of winter weather will bolster demand for seasonal apparel and help lift overall sales.

Mix 'n match season for apparel: "Apparel is clearly a mixed bag," said Michael Niemira, senior economist with Bank of Tokyo-Mitsubishi. "We have some very good and very weak performers."

While shoppers liked Gap (GPS: Research, Estimates)'s line of festive colorful and stripped clothing, they gave a thumbs down to youth apparel retailers Abercrombie & Fitch (ANF: Research, Estimates) and America Eagle Outfitters (AEOS: Research, Estimates).

"Clothing really isn't at the top of the list this year," said Badillo.

Toy story: A splintered picture. The brutal price war among toy retailers already forced FAO Inc., parent of posh toy store FAO Schwarz, into bankruptcy for the second time. But analysts say the real competition this season is between the retail stores and online merchants such as eBay (EBAY: Research, Estimates) and Amazon.com (AMZN: Research, Estimates) as e-tailers offer not just steep price cuts but also free shipping in some cases.