Retail Boom or Bust?

Melissa Teter stands inside her store in Kenwood Towne Center, waiting for the usual midday boom in business that doesn’t exist anymore. Could this widespread trend in retail be here to stay?
“Sales are way down and people are being laid off all over the place,” said Melissa Teter, an assistant manager at Pacific Sunwear in Kenwood Towne Centre. Melissa is a graduate of Miami University with a B.A. in political science. Teter knows that the malls will revive themselves once the economic status of the country improves. She says that it is only a matter of time before business is booming again. In the meantime, all they can do is hope for the best and prepare for the worst.
Cincinnati’s malls are an example of the effects this economy has had on businesses, retail in particular. Northgate Mall in Colerain is owned by the Feldman Mall Properties, and the company reported a total $78.9 million loss in 2008. Large chain stores left such as Champs, Whitehall Jewelers, The Disney Store, among others. JC Penney, an anchor tenant, relocated to the new developments in Stone Creek. Northgate Mall declared bankruptcy in Fall 2008.
The Cincinnati Mills Mall, located in Fairfield, has been sold three times in seven years, as told by Greg Kathman, a development director of the area. In December, he announced that the property had been sold once again. The mall itself is only half-occupied and lacks any anchor stores.
Evidence of the economic crisis in retail became apparent during the Christmas shopping season in 2008. Gallup.com reports that Americans had planned to spend 29% less on the holiday season than a year ago in 2007. Bloomberg.com says that some retailers experienced a boom in January. Ethan Harris is co-head of economic research at Barclays Capital Inc. As quoted on Bloomberg.com, Harris said that January discounts may have brought in consumers, but he does not think it is sustainable.
June Phillips is a second-year student at the University of Cincinnati, and a hairdresser at Mastercuts in the Tri-County Mall. She feels that the economy is hitting the malls harder than she could have expected.
“Our sales in both retail and cuts are dropping quick,” she said. “Not only that, but customers give very little tips too. They’re being cautious about where every piece of their money goes.” Phillips is one of five girls that work in the salon, and one of the few designated as part-time.
“Most of the girls’ hours have been cut back,” said Phillips. “With declining business, it’s all you can do to help the store’s budget.”
Scotty Chang, 25, also works in the Tri-County Mall. He is an assistant manager for Hatworld/Lids. He found that sales were worse during Christmas than he had expected, and hours are slowly diminishing for employees as well.
“I knew the economy was bad, but I figured we’re a hat store, and people would be buying smaller,” he said. “The difference that still continues between now and last year’s sales is ridiculous.”