Experts Talk Hope, Financial Fears, Retail Reality

Those were some of the take-aways at two noon sessions Monday at RECon, the annual ICSC spring conference here at the Las Vegas Convention Center. At a capital markets and occupier discussion, hosted by CB Richard Ellis and attended by more than 300 retailers and CBRE professionals, real estate VP Valerie Richardson of the Container Store and Ethan Penner, executive managing director of CB Richard Ellis Investors/president of CBRE Capital Partners, presented sometimes contrasting views on which way retailing and the economy may be headed. At the other session, Nordstrom was a featured speaker who described how the Seattle-based department store chain has adjusted to the new economic reality and invested more in multichannel marketing¯going after customers not just in its stores but also online and through an ever-increasing array of channels like the Internet and today's popular social networking sites.

Richardson said that retailers are starting to see the first signs of increased spending at higher-end retailers like Nordstrom and Marcus, which could be a "forward indicator" of increasing consumer confidence, which in turn could help to stimulate the economy. She added that as time goes on, "We would all like to see more of a 'V' recovery than a 'W,' recovery," or what is sometimes called a double-dip.

[IMGCAP(2)]Penner's assessment was that the economy is "in a tug-of-war" because of cross-currents such as returning optimism¯whether justified or not¯and a number of looming factors that concern him greatly because they could put the brakes on the recovery or lead us back into recession: the US and global financial troubles, growing problems in Europe and crumbling growth in China. Explaining that he is by nature a contrarian, Penner told of a recent event he attended where, of 500 people in the room, he apparently was the only one who didn't feel optimistic. Since a crowd that large rarely agrees so wholeheartedly on anything, he said, "When 499 people all agree that we're in a good time, I'm sure that we're not."

Although he didn't share the crowd's optimism, Penner said that he could understand it. He said that Americans are suffering from a "fatigue factor," because of the downturn, "tired of saving, tired of not shopping and tired of not having fun." After a while, he said, "Optimism is the only choice for people." And he allowed that optimism, whether justified or the result of wishful thinking, can generate its own momentum and become a factor in stimulating the economy.