NEW YORK — Hunker down, adopt a bunker mentality, hoard cash and control expenses.
That was the advice for retailers at the National Retail Federation’s 98th annual convention and expo during Tuesday’s Super Session, “The Sky Has Fallen: Now What?”
“I don’t see positive growth in ’09,” said J.C. Penney chief executive officer Myron Ullman 3rd. “Sometime in 2010, we might start to see growth again.” Cutting capital expenditure, being more prudent with inventories and adopting shorter lead times will help retailers survive this difficult period, he said.
“We can’t give up on ’09, but it’s going to be a nightmare,” said Peter J. Solomon, founder and chairman of the Peter J. Solomon Company. “Retailers going bankrupt today are going to be liquidated because the demand for retail space isn’t there.”
Mark Zandi, chief economist and co-founder of Moody’s Economy.com, said there’s no easy fix for the economy. “The next six months will be very painful, the six months after that will be merely painful and 2010 will be uncomfortable. I wouldn’t execute on revenue opportunities until 2011.”
Among the concerns raised was the specter of inflation. “There will be massive inflation in three to five years,” Solomon said. “The government can’t keep printing money at this rate.” At the same time, apparel costs will rise. “As the developing world starts to be more consumer-oriented, the cost of our goods will go up. Apparel costs are up 8 to 10 percent in China.”
Attitudes toward spending will change. “Over the last 25 years, the net worth of high income households increased,” Solomon said. “That’s not going to happen. Nest eggs aren’t going to be as big.”
Ullman noted that Americans’ loss of net worth has been $10 trillion since the economic downturn began. The nation’s housing stock has lost $30 trillion in value. “That has a big effect on the psyche.” Solomon agreed, calling the loss of jobs, foreclosures and bankruptcies “psychologically scarring.”
What will it take to get emotionally battered consumers back into stores? “Confidence,” said Zandi. “From a consumer’s point of view, a stimulus package that’s big enough and fast enough,” said Ullman.
Solomon suggested nationalizing banks and using bailout money for foreclosure mitigation to keep people in their homes.
No one should be too surprised the good times are no longer rolling, but rather, amazed at how long they lasted. “This is the end of a long run that’s lasted since post-World War II,” Solomon said. “Retailers kept getting easy money to expand. The world ran out of ideas in retailing. This is just a huge wake-up call.”
Later, at the annual industry luncheon, Michael S. Jeffries, ceo of Abercrombie & Fitch, accepted the NRF gold medal award and Nick Badminton of South Africa’s Pick ’n’ Pay Stores picked up the international retailer of the year award. “The economy is in turmoil, the world is reeling and the end is not in sight,” Jeffries said. “So what do we do? We trust each other. We trust in our business partners. Working passionately will bring us back to more promising times.”
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews
“Stranger Things” is getting a new cast member for season 2. Meet @sadiesink_, the 15-year-old who will be joining the Netflix series for its new season. You may recognize her from “The Glass Castle” with Brie Larson and Woody Harrelson, but the Texas native’s next role goes in an entirely different direction. She describes her character, Max, as “a rough and tumble skater girl [who] becomes friends with the boys at school.” The second season debuts on October 27. (📷: @jgreenery) #wwdeye
Amid the Harvey Weinstein controversy, there’s another sector that’s being put under the spotlight for sexual abuse: the modeling industry. While rumors about abuse and sexual harassment of female and male models — and the photographers, agents and others who perpetrated it — have circulated within the fashion world for years, model @cameronrussell started posting stories from models on Instagram last week about abusive situations they’ve encountered — from sexual harassment and molestation to attempted rape. Over 75 have weighed in so far. Read more on WWD.com. Link in bio. #wwdnews
To celebrate its 16th anniversary, @dylanscandybar tapped designers and celebrities to create mosaics out of candy. The mosaics will be auctioned off to support the philanthropic cause of each participant’s choice. Pictured here is the mural created by @aliceandolivia's Stacey Bendet. For a first look at some of the other artwork being unveiled tonight, go to WWD.com. #wwdeye
The annual Veuve Clicquot Polo Classic in Pacific Palisades this weekend drew Kate Hudson, Tracee Ellis Ross, Laura Dern and more. See pictures of the star-studded event on WWD.com. (📷: @chelsealaurenla) #wwdeye
In his new book “Hollywood Royale,” Andy Warhol’s Protégé Matthew Rolston celebrates the Eighties revival of Hollywood glamour. Featuring more than 100 portraits taken by Rolston from 1977 to 1993, the book contains photos of icons like Michael Jackson, Cyndi Lauper, and @drewbarrymore, pictured here in 1991. “Hollywood Royale,” out today, will be accompanied by an exhibition opening at Los Angeles’ Fahey/Klein Gallery on March 1. #wwdeye
"Nowadays when life is not so happy with everything going on in the world, I think people come to me for a little bit of whimsy and color and fun." - Designer Rebecca De Ravenel on her cult-favorite jewelry line. (📸 : @vsteves) #wwd40
“Everyone is talking about how the retail industry is struggling, but I think it’s an incredible time because brands who are doing something different and innovative are setting themselves up for the future,” said @adamgoldston, who founded the luxury athletic brand @apl with his brother @ryangoldsten. The Goldston’s are part of WWD’s 40 under 40: a group of industry notables. See the rest of the list on WWD.com. (📷: @vsteves) #wwd40
@eyeswoon blogger Athena Calderone debuted her first-ever cookbook, “Cook Beautiful,” which is heavily centered on the presentation and visual expression of food. Pictured here are her miso glazed carrots from the book. Get the recipe on WWD.com. (📷: @johnny_miller_) #wwdeye