The boom times have passed for many Florida retailers, who face daunting challenges — from hurricanes to a steep housing slump.
"The Florida market was one of the hottest, so the wilder the party, the worse the hangover," said Per Berglund, senior economist at Moody's Economy.com, noting that Florida and California have had the most dramatic declines in real estate. "These problems will continue to trickle down to retailers into 2008, which will be a tough year."
Retailers, who are also beset by rising insurance rates and property taxes as well as lackluster consumer spending, range from Stein Mart, with 46 stores in the Sunshine State, to Dolores Vaccarelli, the owner of a single boutique.
"Florida continues to be difficult, with a sales decline relative to the rest of the country," said Michael Fisher, who departed in August as chief executive officer of Jacksonville-based Stein Mart, which has a total of 271 stores in 30 states. "While the company's comparable-store sales have declined between 1 and 2 percent per quarter in 2007, the decline in Florida's comparable-store sales has been triple that.''
After four years of solid growth, Vaccarelli, owner of LaModa Boutique, a better-to-bridge women's specialty store in Satellite Beach, noticed a downturn in October 2006, and sales have fallen 20 percent since then.
"Real estate is huge, and trickles down,'' said Vaccarelli, also a principal with Vaccarelli & Assoc., a contemporary wholesale showroom at AmericasMart in Atlanta. "Florida is overdeveloped...so now everybody from mortgage brokers to construction workers and real estate agents are feeling it."
The slump in Florida home sales began in mid-2005 and has continued with monthly year-over-year declines in double digits — as much as 47 percent in some areas, according to the Florida Association of Realtors. Nationally, sales of existing homes dropped 4.3 percent in August to an annual pace of 5.5 million, which is the slowest in five years.
The Florida Association of Realtors reported existing single-family home sales in August fell 26 percent statewide compared with the same period last year, and 28 percent year-to-date. Condominium sales were down 25 percent versus a year ago, and 27 percent year-to-date. Median home prices dipped 6 percent in August, to $231,000 from $246,800 the previous year, and 4 percent for the year.
Issa Rae stopped by WWD's NYC headquarters to talk about season two of "Insecure," which premieres this Sunday on HBO. Click link in bio for all the details. #wwdeye (📷: @jgreenery; Styled by @mayteallende)
A Stella McCartney sketch of a custom dress made from protein-based silk in partnership with biotech lab Bolt Threads. The dress will be displayed at The Museum of Modern Art's upcoming design exhibition, "Items: Is Fashion Modern?"