NEW YORK CITY-Industry experts all seem to agree, the economy isn’t looking too bright and it could make times tough for retailers here who have some of the highest overheads in the world. On East 57th Street, for example, rents can soar as high as $700 per sf, a price that in a bear market, could break the bank for any business not excelling in the face of reduced spending. While almost all agree that crying recession may be too dire a prediction just yet, they all seem to agree the weak will fall.

The Federal Reserve last week began warning about the weakening economy and he word recession has started to pop up with ever-increasing frequency. The retail sector has been enjoying the longest economic expansion on record. Now, big spenders during the high times are looking at their credit card bills, contemplating a possible looming recession and thinking twice about racking up any more debt. Now retailers, even offering huge holiday sales, are worrying about their own finances.

Even President-elect Bush has been fanning the flames, stepping up his warnings about the economy just before Christmas and the start of Chanukah. While some on Wall Street are pondering the lack of a Bush rally on the floor of the Stock Exchange, retailers are hoping people have just been holding off on making their purchases until after year-end bonus checks clear.

While the New York Stock Exchange and Nasdaq continue to try to sustain a rally, retailers are hoping to recapture the Black Friday promise this year of exceeding last year’s spending, despite a lackluster holiday season that followed. Insiders tell it’s not looking too promising, though. While dot-coms are dying left and right, this year on-line spending saw success, while bricks and mortar stores put out the clearance sale signs in the hopes that bargains would bring big spenders.

Of course all the experts agree, only time will tell, but some have suggested that rents will have to come down as businesses begin to look for cheaper addresses or close altogether. One retailer commented, “How do they think they’ll keep getting $700 per sf in a recession?”

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