It was a big step that new retailers often make at the mercy of shopping trends, consumer spending and other economic factors.

Still, every year entrepreneurs like Maxwell get into the local retail game, and for this coming year as the economy improves it is anticipated that more retailers will go into business.

The $18 billion industry has been on the rebound since 2002, when statewide retail sales remained flat.

This year through August, state figures show retail sales are up by $441 million, or 4 percent, and an additional 1,200 people, or 2 percent more, are working in the industry that employs about 65,000 people, or 10 percent of the state work force.

The growth is being enabled by consumers who generally had more spending money. Inflation-adjusted personal income rose an estimated 3.5 percent in the first half of the year, according to University of Hawai'i economists. They project personal income growth after inflation will be 3.4 percent for the full year and 3.2 percent next year.

Tax cuts and a rising stock market are also helping increase the spending power of consumers, as are low inflation and low interest rates.

Bank of Hawaii chief economist Paul Brewbaker said low interest rates and rising real estate values have allowed consumers to tap the equity in their homes, freeing up cash for retail purchases.

"Everybody refinanced their house about five times, is driving around in a new SUV and has cash flow left over," he said.

Retailers also are predominantly upbeat, according to an August Bank of Hawai'i business confidence survey. Fifty percent of retailers surveyed expected 2004 sales will be somewhat higher or much higher, while 11 percent expected somewhat lower or much lower sales. The remaining 39 percent expected no change in sales next year.

Local real estate firm Colliers Monroe Friedlander expects retailers to lease 150,000 square feet of the 921,000 square feet of available retail space on O'ahu next year, the biggest increase in five years. Rents, Colliers said, should stabilize in 2004 after six years of declines.

Many of the new merchants will be giant corporate chains, such as Wal-mart and Sam's Club, which are scheduled to open stores near Ala Moana Center, home improvement retailer Lowe's, which is building a Kona store on the Big Island, and electronics seller Best Buy, which plans a Pearl City store.

About 40 other local and national retailers are expected to open next year in the 350,000 square feet of space vacated by J.C. Penney at Ala Moana and Pearlridge centers, further broadening choices for consumers.

Analysts also said there is a lot of room for retailers such as Crate & Barrel, Pottery Barn, Restoration Hardware and Bed, Bath & Beyond to move in and satisfy strong demand for home accessories.

Demand has been so strong for home furnishings that local importer Joe Berardy decided to get into retailing, opening Hawaii Home Interiors/Hanalei Bay Designs at Nimitz Center near the Iwilei Costco earlier this month.

"I always told myself I didn't want to go into retail, but this presents a good opportunity," he said. "We think the timing is really good."

Berardy, 42, had built up a 12-year-old wholesale business primarily supplying hotels, interior decorators and retailers with Hawaiian-style furniture and home accessories made offshore.

He said he decided to sell to the average kama'aina because home sales are repeatedly breaking records, competition is limited to a few major players and interior designers were urging him to set up a showroom.

Not all retailers foresee a year free from struggle. Stores that rely on tourists from Japan, including duty-free retailer DFS Hawai'i, will continue to face challenges because Japanese tourists are spending less and visiting in smaller numbers.

Other retailers hope to capitalize on Hawai'i being a "safe" visitor destination for travelers too regularly reminded of potential terrorist attacks.

Paul Farmer, a 57-year-old high-tech industry veteran living in California, invested in three Hawai'i Cold Stone Creamery franchises to be run by his younger brother and sister-in-law who want to move to the Islands.

Farmer, whose wife was stuck on Maui following the Sept. 11 terrorist attacks, figures that Hawai'i's location has become an advantage for business.

"We sort of felt that on the long-term, people would be reluctant to fly to Europe and abroad, so for a nice tropical area, there would be more people flying to Hawai'i," he said.

Farmer expects to open the ice cream shops next year at Kane'ohe Bay Shopping Center and at sites to be selected on the North Shore and in Hawai'i Kai.

Meanwhile, Maxwell, the body products wholesaler-turned-retailer, said she has been pleasantly surprised by the reception given her new Windward Mall store, Bamboo Island Bath & Body.

"I just wanted to try it out," said the 33-year-old who runs the shop with her sister-in-law, Lisa Durell. "I'd like to open a few more. I'm not totally sure how it's going to go."