By  on February 13, 2009

NEW YORK — As major department and specialty stores dominate the headlines with layoffs, budget cuts and markdowns, there’s one retail sector generally being overlooked: the little guy.

The latest to hit the wall is Georgina, a high-end boutique with stores in Manhasset, N.Y., and Hewlett, N.Y., which is closing up shop at the end of the month.

Small, independent boutiques like Georgina that for years have nurtured — and in many cases introduced — designer talent are rapidly disappearing in the credit crunch and deepening recession. The last few months alone have seen the closings of such iconic designer stores as Linda Dresner in Manhattan and Tracey Ross in Los Angeles. Many of these boutiques are exiting at a time when major specialty stores such as Saks Fifth Avenue, Barneys New York and Bergdorf Goodman are dramatically cutting inventories and the number of designers they carry. And as the fall season of runway shows officially kicks off today at New York Fashion Week, the bad news for the more than 200 designers showing is that there are fewer and fewer stores for them to sell.

Georgina catered to Long Island’s wealthy Gold Coast and South Shore crowd and was known for carrying such lines as Michael Kors (which it carried exclusively on Long Island before Kors opened his own Manhasset boutique); Zac Posen; Dolce & Gabbana; Peter Som; Proenza Schouler; Christian Cota; Valentino; Giambattista Valli; Andrew Gn, and Celine. The store fell victim to the market crash and slowdown in luxury spending, and its owner blamed major stores’ excessive markdown activity last fall for accelerating its demise.

“When Saks and Bergdorf Goodman played their game and dropped 70 percent off in the season, they ruined it. No one wants to pay retail anymore,” said Christina Georgina Makowsky, owner of Georgina.

“There’s nothing to be happy about in retail now. The luxury market has been devastated,” she said. “It’s because of the economy. I don’t believe that going forward, it’s the right place to put your money. I don’t feel comfortable. People’s mind-sets are changing, and my mind-set is changing. There are more intelligent ways to spend your money. I’m going to take a time out and reevaluate retail.”

Michael Kors, for one, is upset about the store’s closing.

“Christina Makowsky exemplifies luxury retailing by balancing fashion and newness while always keeping an eye on her clientele and their lifestyle,” said Kors. “Georgina has been very influential in bringing a big city sophistication to the New York City suburbs. She and her team have been remarkable partners and champions for over two decades. The closing of the store marks the end of an era.”

Shirley Cook, chief executive officer of Proenza Schouler, had been doing business with Georgina’s Manhasset store for the past year. “She [Makowsky] has been a great client, and it’s an amazing store. It’s very sad to see. They took so many risks, worked with young designers, styled their stores and pushed fashion concepts, and now they’re closing.”

Makowsky, who was called by one competitor “a fabulous merchant who carries of-the-moment” clothing, along with her business partner Tony Scardino, operated the Hewlett store for 28 years, and the Manhasset boutique (across the street from the Miracle Mile) for 17 years. Some 17 employees will be affected by the stores’ closing.

“I love design and I love fashion, and I’m not making people happy anymore,” said Makowsky. “They’re nervous and it’s not fun.” She said she’s well aware of how to ride out a recession and has done that twice in her career, but “This is not a recession to me. It’s a new day and new way of life. I wanted to end on a high note.”

Georgina manufactures its own private label collection, ranging from swimsuits to ballgowns, under the store’s name, which Makowsky is considering continuing.

A few high-end specialty stores continue to weather the storm on Long Island, namely Hirshleifer’s in Manhasset; Shari’s Place in Great Neck and Julianne in Port Washington, which opened in 2007 after retailer Janet Brown’s death, and is managed by her former right-hand person.

But there’s no question the challenges are formidable. Shari’s Place, a 30-year-old boutique, ran ads in The New York Times last Sunday and Thursday promoting spring merchandise at 30 percent off — and the merchandise had just arrived on the selling floor.

“We’re hanging in there,” said Shelley Hirshleifer, vice president of Hirshleifer’s, the 100-year-old designer emporium in Manhasset known for selling such collections as Chanel, Dolce & Gabbana, Versace and Balenciaga. She said the store is coming up with innovative ways to entice the customer, such as teaming up with American Express to offer double points for any Chanel purchase with an Amex card.

Because major stores marked merchandise down so early last fall, Hirshleifer’s had to start its sale two weeks earlier. “We don’t like to because a department store does,” she said.

Lori Sills Hirshleifer, vice president, said the store is reducing its buys for next fall. As she goes through the market, she said people aren’t panicking. “Everyone’s very cautious. It’s a difficult time to be spending money on a buy. I don’t know what will happen this spring. We have been seeing some life the last few weeks.”

She said she felt badly about Georgina’s closing. “It’s sad. It’s very unfortunate that the small guy has to suffer for what’s going on,” said Sills. She said the large stores can ask vendors for markdown money, but it’s more difficult for the small specialty stores.

Randi Newman, who manages Julianne, said the store is holding its own and she’s been fortunate because Janet Brown had a loyal customer base, many of whom are now shopping at Julianne. “I cannot sit still and I go to my customers,” said Newman. “There is no evening business, and I’m selling timeless pieces.” Among her lines are Lanvin, Prada, Marni, Dries von Noten and Martin Margiela.

Elsewhere in the tri-state area, Mary Jane Denzer, owner of the 30-year-old eponymous high-end boutique in White Plains, N.Y., called business “very tough.”

“The customer, even if they have the money to spend for the clothes, feels very guilty. They’re not spending right now. There’s too much uncertainty,” she said.

Denzer decided to change its merchandising strategy this season. “My feeling is this season is geared to special occasions. I put my money in a very different direction. The store is completely ‘go somewhere’ to a luncheon, Bar Mitzvah, wedding, a party. There’s very little sportswear. It’s a better way to merchandise the store right now. People are not going to pick up a luxury sweater or jacket.”

She said last fall she sold a customer a dress for 20 percent off, and Barneys had it for 75 percent off. But the customer kept the dress, because she’s been a loyal customer.

She said the business is running “way behind last year.”

“But I’m going to stay alive no matter what. Anybody who tells you business is great is not telling you the truth. Everyone’s in a state of shock and they’ll get out of it. I think it’ll pick up after the February holiday. I hope so.”

Scott Mitchell, vice president of Richards of Greenwich and Mitchells of Westport, Conn., a 50-year-old specialty store, said, “We’re still buying and we’re still out in the market. And we’re continuing to go forward. We’re still looking at the same designers and new designers. We went high-end because our clients wanted it.”

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