Retail

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Retail

Los Angeles retailers, initially confident of a better than average 1997, were ultimately let down and for many of them, that disappointment will extend into 1998.

L.A. consumers are no longer spending like they did during the pre-recession 1980s and this trend is likely to continue through 1998 and beyond.

Aging baby boomers are basically in a savings mode as they approach retirement, and the tumult on Wall Street is making them even less likely to splurge in 1998.

“The days of conspicuous spending and double-digit (retail sales) gains are long gone,” said Richard Giss, a retail analyst with Deloitte & Touche LLP.

Overall, retail sales for L.A. County in 1998 will be about $58 billion, up 4.4 percent from 1997, according to projections by the Economic Development Corp. of Los Angeles County. That is essentially flat from the 4.2 percent growth in 1997, compared with 1996.

Some types of retailers will fare better than others in 1998, though.

Middle-range merchants such as JC Penney and Robinsons-May face tougher times, while wholesale outlets and discount department stores such as Wal-Mart and Target will continue seeing robust gains.

Wealthier L.A.-area shoppers also seem to be spending more, and will likely continue to do so in 1998, helping high-end stores such as Neiman Marcus and Saks Fifth Avenue, said industry analysts.

Specialty apparel stores with products geared to niche markets also will fare better than more-mainstream department stores. This, say experts, is due to the growing enthusiasm by consumers for new trends.

Home furniture and accessory stores like Crate & Barrel and Pottery Barn also should do well.

While several new retail construction projects are looming on L.A.’s horizon, the primary activity on them in 1998 will be demolition old retail centers, say experts.

“L.A. is a very mature market, it’s already developed,” said Mark Tarczynski, a retail broker at CB Commercial Real Estate Services Group. “What you’ll be seeing are in-fill developments, knocking down old retail developments and building new ones.”

Hildy Medina

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