Outlook for Holidays Is Cloudy as Back-to-School Sales Drag

Retail
by Deborah Belgum

It's still early but retail analysts are warning that sluggish back-to-school sales in August could portend a weak holiday season, by far the most important time of the year for retailers.

"People are feeling conservative," said Richard Giss, a retail expert and partner with Deloitte & Touche in Los Angeles. "It is not an issue of money to spend but a willingness to spend."

August retail sales generally hovered around 1 percent, though Federated Department Stores Inc., parent of Macy's West which has several L.A. locations and Bloomingdale's, saw August same store sales dip 5.8 percent.

There are reports, however, of a pickup in spending this month, especially over the Labor Day weekend. Some analysts believe that back-to-school spending has tended to push more into September, after students check out what their classmates are wearing. In addition, year-over-year comparisons will be strong, given the spending pullback after the terrorist attacks.

As for the holidays, the outlook is guarded as job worries could keep the reins on spending, especially if the economy and stock market continue to tread water.

Daily Meal

Grill Concepts Inc., the Los Angeles-based chain that operates the Daily Grill and Grill on the Alley restaurants, wants to succeed where other eateries have failed.

The company is working to open a Daily Grill on Rosecrans Avenue in Manhattan Beach by early December in a space vacated by Wolfgang Puck Caf & #233;.

Competition is stiff in the area. In the same office building is a McCormick & Schmick's seafood restaurant. Across the street is a Houston's, and next door is a P.F. Chang's.

Bob Spivak, president and chief executive of Grill Concepts, negotiated a joint venture deal with Continental Development Corp., which owns the restaurant space.

Spivak feels the Daily Grill will do well because of the upscale demographics in the area and the high occupancy rates in the office buildings. "We feel the downturn in the economy is a short-term cycle," he said.

In April, Daily Grill closed its Encino location when its 10-year lease was up. "We never did a lot of volume there," Spivak said.

Encino, he said, is a difficult place for restaurants. "There's not a lot of density in the market even though the demographics are great. It's mostly single-family houses."

Another Opening

Design Within Reach is making a foray into Southern California.

Design Within Reach opened its first store two years ago in San Francisco. There is one in Oakland and another in Palo Alto.

Last month, it opened its first store in Southern California with a retail outlet in Santa Monica. Another store is planned for the Pasadena area.

Oakland-based Design Within Reach is concentrating on the Southern California market because of the number of online customers in the Los Angeles area.



Staff reporter Deborah Belgum can be reached at (323) 549-5225 ext. 228, or at dbelgum@labusinessjournal.com.

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