Observations & Conversations
 |
I guess some retailers don’t realize that if you ignore your customers, they are more than happy to return the favor. |
The ICSC New York show wasn’t as good as I had
hoped, but it wasn’t as bad as it could have been. The best thing was that
people were in the mood to party and Wednesday morning a lot of us were paying
for the night before. I met only one retailer that I wasn’t familiar with, which
is a sad commentary on our industry. Most of the chains decided to let their
broker work the floor, rather than themselves schleping into the city. We
collect literature from every booth so we can get a good overview of what’s for
lease, sale and how many new shopping centers are being proposed. I always find
it intriguing to see on a collective basis what’s out there, so on Wednesday
night after we got back to the office I dumped about 100 pounds of paper on the
floor and started sorting it into piles of retailers, existing sites, proposed
centers, lenders and sites for sale. Lots of companies are looking to buy, but
there’s not much on the market and what is on the block is perceived by most to
be over priced. I had more info on acquisition needs than I did centers for
sale. I spoke with several developers breaking ground next year and they find
that getting financing is tougher, yet the guys developing single-tenant sites
didn’t seem to be having any trouble finding a lender. Not many new projects are
on the drawing board, my guesstimate was that for every hundred existing centers
being pitched at the show, there was one new center being planned. However, I
met more construction companies at this show than I can ever recall.
There was loads and loads of existing space for lease being offered at the show.
I looked at one company’s portfolio and wondered how they paid the electric bill
considering the amount of vacancy they have. The thing that stood out the most
when going through hundreds of leasing packages was the number of 80,000 sq.ft.
to 200,000 sq.ft. stores available for lease. I even saw a former Rickels store
available and you know that’s been sitting vacant for a few years. Another
really impressive thing about this year’s show was the number of principles on
the floor. Either their wives didn’t want to fly to Europe, or they are more
concerned today than in the past about watching their assets. I heard that even
Simon and Glimcher took a stroll in the exhibit hall.
Overall, it was a good show and there will be deals made because of it. . . they
may take a year to finalize, but nonetheless it was better to be there than to
stay in the office. Attendance was off from last year’s show, but the core of
real dealmakers were in full force. No one seemed to be panicked or distressed,
but it was definitely a more mellow and serious show than in years past. An
old-timer said that not one of his meetings stood him up, and that was a first.
I think that next year developers will get even more aggressive on leasing their
space, either through marketing it more in hopes of finding a tenant that will
pay the asking rent or they’ll drop the rent and take any contribution to cash
flow, with the mentality of “to hell with a 12% return, let’s just hope we can
pay the mortgage with something leftover.”
Retailers are taking the same attitude these days with such heavy mark downs
before Christmas. I’m sure volumes won’t be off terribly this season over last
year, but the profits will be dismal. Talking about volumes, I have to tell you
a story about my trials and tribulations in remodeling my house. I went to Expo
Design. It was my first visit as a shopper and my last. Ted drops me off at the
store with the understanding that he’ll come back in a few hours and go over my
suggestions. I start in the kitchen section, but nothing is priced and there is
inadequate sales help. Being a total novice to cabinet makers, counter tops and
appliances, the only way I could get an education on what to buy was from
listening to conversations of the lucky people who actually found a sales
person. Then I moved onto the bathroom section. I asked how much does such and
such shower and tub set cost and the sales person said, “we no longer carrying
that model” (why would they waste floor space on something they don’t even
sell?). So I continue looking and find something else, so again I hunt down a
salesperson only to hear, “I don’t have the prices and the manufacturer doesn’t
open till Monday,” so I gave him my card to call me on Monday with an estimate.
Two hours later, I’m in the tile and flooring department. No lie, I walk behind
the lone salesperson for 45 minutes waiting my turn for her undivided attention.
Finally, I sit next to the salesperson who’s on the phone with a customer and
start calling the store from my cell phone. No one answered the phone at the
store, so I got up in search of the store manager and a clerk, noticing the rage
on my face, found a salesperson. Unfortunately this salesperson decided they had
rather gab with their coworkers than show me products, so I lost it right there
on the sales floor. After I had finished my tirade and got applause from other
customers in my same boat, Ted showed up. At first I think he figured that I was
just frazzled from shopping so much, and he found a “designer” to sit with us
and they came to the conclusion that we live eight miles outside of their
territory and couldn’t offer design help nor could they do any installation. At
that point Ted asked for the manager. The store manager heard my issues with the
store and said he could probably work something out if we were willing to pay
extra and of course we said let us know how much more. Ted gave his card to the
store manager with the expectation we would get a call in a day or two. It’s
been three weeks - did they call your house by mistake? Same thing happened at
Lowe’s. I asked a salesperson a question and was told that their “kitchen
expert” had to go for an emergency measure for a customer, so I left my card and
no one’s bothered to call me back. Home Depot on the other hand has been
extremely professional, but unfortunately their selections are limited. Can you
imagine what kind of volume Home Depot would do if only they deepened their
product selection or better yet if their sister operation had good management? I
guess some retailers don’t realize that if you ignore your customers, they are
more than happy to return the favor. Please, if ever you have a problem with us
at The Dealmakers, let me know. I promise, you won’t be ignored.
On that note, I want to wish everyone happy holidays and a wonderful new year.
Thanks for your friendship.
Ann O’Neal, Publisher