RETAIL giant Myer will close its worst performing stores - and shrink several others - as the company deals with poor sales.

Myer stores at Tuggeranong in the ACT and Forest Hill in Melbourne will close next year.

And Fairfax reports outlets in Dandenong Plaza in Melbourne and Wollongong central also face the chopping block.

And other stores are also considering reducing their size to save money.

But Myer spokeswoman Jo Lynch said the next three weeks of trade would be the biggest of the year.

She said times remained tough for retailers, but the interest rate cut was expected to boost sales from last year.

And traditional children's toys, such as Barbie and Lego were strong sellers this year, while cook books, fragrances and technology, such as digital cameras, iPods and tablets were popular with the adults.

Australian Retailers Association executive director Russell Zimmerman said the unusually cold start to summer across the country was hurting clothes and shoe sales.

"I think retailers out there are seeing some blue sky, a bit more tinsel on the Christmas tree," he said.

"But clothing retailers are still doing it fairly tough out there."

"The weather has been too cold for them - they need that really good run of hot weather and they haven't seen it."

Fairfax reports other stores, such as Premier Investments, the owner of Portmans, is also reviewing its store strategy and could close some next year.

And last week, Fletcher Jones said it would close on third of its stores.