BIG PICTURE: Retail's Down-Cycle Hit Will Be Called by Type, Locale

NEW YORK CITY-Don’t go by JC Penney or Montgomery Ward. Not all retail is suffering, despite a lackluster 2000 that ended with the whimper of an equally lackluster Christmas season. According to retail leasing executives around the country, the bleeding isn’t universal, and there are markets and vertical types that are holding up–and will continue to hold up–just fine, thank you.

Is this the false bravado of typically overly optimistic brokers? Certainly, it’s not the best of times for the sector, as Northeast bureau chief Amy Vaughn reports. Brad Mendelson, executive managing director at Insignia/ESG, tells her that the changes in the retail landscape “don’t have much to do with the downturn. There’s a tremendous duplication of businesses out there. The economy is only expediting what would have happened anyway.” He says that while suburban retail areas will suffer in the coming months of adjustment or correction, markets such as Manhattan will remain mostly untouched by the shakeout.

Although the holidays were a letdown and spelled an end to some retail businesses, Marianne Waggoner, executive manager of retail services for CB Richard Ellis, tells West Coast South bureau chief Patricia Kirk that, “We’re actually in a cycle of expansion and emerging retail properties.” She notes that retailers with a strong brand–like the popular Kohl’s stores, which announced plans to expand westward just this week–will grow stronger, even during hard times. “Strong branding–something that you’re known for–seems to be the characteristic that gets you past the other issues.”