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Shopping Centers Today -> July 2002
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EXPERTS PROVIDE AN UPBEAT OUTLOOK FOR RETAILERS
By Donna Mitchell
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| Dana L. Telsey |
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Richard S. Sokolov |
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| Gary J. Nay |
Things are looking up for retail, according to a leading developer, a top analyst and a department store executive.
Retailers have performed better than expected this year, despite a rough economy, and the sector’s performance is not only the result of the sales contributions of discounters, they said in a panel discussion titled “Spending Trends — Wall Street on Retail.” Consumer electronics retailers continue to flourish, as do home goods merchants, and new retail concepts are also appearing, they said. Moreover, specialty apparel retailers offer plenty of bright spots for developers looking to stock their centers with top-notch merchants.
“We’re very pleased overall,” said Richard S. Sokolov, president and COO of Indianapolis-based Simon Property Group. “The demand for space seems to be higher than we anticipated. There are fewer [retailers] heading out the door and more coming in.”
Early this year retailers responded to the leaner economy by offering merchandise more appropriate for their customers, tightening inventory levels and scaling back on their ordering, observed Dana L. Telsey, senior managing director and retail analyst at New York City-based investment bank Bear, Stearns & Co. Those tactics have paid off by enabling retailers to sell at full price and engage in less discounting, she said.
Speaking to a packed room, Telsey singled out some retailers that are likely to do particularly well in the near future: Chico’s, Christopher & Banks, J. Jill and Talbots will be heavily represented in regional malls by 2005; their demographics are being underserved now, she said.
From 2000 to 2005, the population of seniors and teens will have increased by 23 percent and 18 percent, respectively. Yet seniors are the most underserved of retail customers, with only 36 stores per 1 million shoppers in that age group, she said.
Among better-known names, Ann Taylor Loft continues to thrive, as do a number of offshoot retail concepts, such as Hot Topic’s Torrid, a store for larger girls. Aeropostale is opening up more than 200 stores this year, and Talbots boasts some of the highest sales for full-priced merchandise. Telsey also had praise for Gap, which she said is filling its racks with the clothes its target market wants to buy and selling merchandise at full price, she said.
A return to formal wear in the workplace is benefiting such retailers as Brooks Brothers and The Men’s Wearhouse, she added.
Charlotte Russe, Forever 21, Wet Seal and other stores for young women continue to do well, she said, because “it is a favorable demographic, it is growing, and they have money to spend.”
Consumer electronics is a particularly promising category. “It’s the dawn of the digital age,” said Telsey, explaining that consumer electronics sales have grown at a rate of almost 6.5 percent in the past five years. The average household spends about $1,000 a year on electronics.
She also had encouraging words for department stores, which have steadily lost market share to discounters in recent years.
“While department stores have been labeled recently as yesterday’s retailer, they are not going away soon,” she said. “They are big and can become better.”
Department stores are responding to the challenge from discount stores, said Gary J. Nay, vice president of real estate at Federated Department Stores, Cincinnati. They are tightening inventories, controlling expenses, moving goods out earlier and marking down merchandise earlier, he said. “We’ve seen department store companies change the way that they do business.”
 | Current Issue February 2012 |