Throughout my previous 25 year career in retailing, I have experienced the constant change within the retail industry with the rise and stall and fall of new concepts, all part of the Darwinian process that has included mergers, consolidations and bankruptcies. Survival of the fittest.
Whenever I’m traveling, I am forever a student of retail. I can’t help myself but view a retail scene and specific stores and concepts with a critical eye. I am trying to dial that down a bit, but admittedly, it’s not been that easy for me! So when we were in LA this past week, and walked the higher end retail areas of Rodeo Drive, Robertson and Melrose, I was jarred by all the closings and boarded up stores. I lived in Los Angeles from 1988-1991, and I visit there with some regularity and I have never seen anything like this.
We all read about the bankruptcies and liquidations of retailers like Circuit City, Mervyn’s, Linens-N-Things, The Sharper Image and Fortunoff. But to really see how the global economic crisis is impacting the ‘high end’ customer is pretty startling. I just read that real estate prices in The Hamptons are down about 25% for the same kind of property from a year ago; certainly some areas were Bernie Madoffed big-time. But it’s much, much more than that.
The main point I’m trying to make here is that this pullback is MAJOR and has hit almost everyone, and that it will take a long, long time for these vacant places to be filled with retailers again. It is much worse than anything I have seen in over 25 years.