BY RYAN DORAN and ALEXANDER SOULE
With the arrival of Black Friday that traditionally kicks off the holiday shopping season, Fairfield County”™s retail landscape has seen a shuffling with the influx of big new retailers, as well as small independent vendors shopping for better storefronts at good lease rates.
About three in five real estate professionals expect lease rates to drop over the next three months, according to an October survey by the Connecticut Business and Industry Association, the Connecticut Economic Resource Center, and DataCore Partners; with some saying rates could drop by more than 5 percent.
Splurge, a specialty gift shop in Greenwich, recently moved to Lewis Street from above Greenwich Avenue on East Putnam Avenue. Opened by Sonia Malloy in December 2007, Splurge has enjoyed 50 percent annual growth despite the recession”™s impact on leisure spending.
“We needed to double our space in order to drive the growth we were seeing,” Malloy said. “The old store wasn”™t conducive to that kind of growth and wasn”™t allowing us to offer the kind of shopping experience we thought our customers deserved.”
Malloy said it was very important to be open in the first week of November in order to be up and running for the holiday season, which accounts for about a quarter of her total sales for the year and half of her total profits.
“It”™s a critically important month,” she said. “In terms of ramping up, we always up our inventory levels at the beginning of December; we carry about one-and-a-half to two times the normal inventory.”
Several new stores are ramping up throughout Fairfield County in the past several weeks, including the anticipated debuts of outdoors vendor REI in Norwalk and Dick”™s Sporting Goods at Danbury Fair Mall.
After pushing hard for a luxury department store such as Nordstrom to take the vacant “anchor pad” at Danbury Fair Mall once occupied by Filene”™s, mall owner Macerich Co. instead filled out the space with two mid-size retailers in Dick”™s Sporting Goods and Forever 21.
Of course, Danbury Fair Mall is not the only retail property sprucing up ”“ the Westfield Trumbull Shopping Mall is putting the finishing touches on a $35 million renovation, with several new stores signing leases along with LA Fitness, which has taken space formerly occupied by Circuit City.
At its grand opening weekend in early November, employees of Dick”™s Sporting Goods nearly outnumbered shoppers, but they were not alone among the mall”™s stores ”“ even Santa Claus had plenty of time to stretch his legs, with few families yet appearing for the obligatory photo opportunity.
Customers expected to come
Foot traffic was picking up in mid-November, however, and mall spokeswoman Melissa Eigen expects that to intensify; Danbury Fair Mall retailers have told her they are seeing earlier patrols by holiday shoppers this year, which the National Retail Federation says makes for a wise consumer given attempts by stores to limit the inventory they stock this year.
“In anticipation of weak demand, many retailers scaled back on inventory levels to prevent unplanned markdowns at the end of the season,” said Tracy Mullin, CEO of the National Retail Federation, in a prepared statement. “Once the most popular items are gone, retailers won”™t have anywhere to get them, so if there was ever a holiday season to buy early, this is it.”
The National Retail Federation is forecasting a brisker holiday shopping season this year ”“ holiday shoppers in the Northeast will average $785 in gifts and other purchases this holiday season, according to an annual survey by BIGResearch published by NRF ”“ up about 3.5 percent or $27.
For its part, Archstone Consulting expects retail sales nationally to increase just 1.5 percent this year from 2009, after a gain of 0.4 percent that year and a drop of 3.9 percent in 2008.
Both so-called “value” retailers and luxury retailers have seen moderate to strong growth this year, according to Archstone, a division of The Hackett Group Inc. with an office in Stamford. And back-to-school shopping, typically the second busiest period of the year, was up better than 10 percent this year, despite ongoing pressures from the weak housing market, high unemployment and tight credit.
Value attracts shoppers
“Retailers like Costco and Kohl”™s have successfully proven that value can bring in shoppers and grow sales without diminishing their retail brand equity strength,” said Dave Sievers, strategy and operations practice leader for Archstone. “On the other end of the spectrum, luxury goods sales began rebounding early in the year, and are nearing pre-recession levels. This segment should continue to experience growth during the holidays.”
As Splurge settles into its new digs, Malloy said she remains vigilant about the price point of her store”™s gift items as the holiday shopping season progresses. And if retailers are stocking smaller inventories this year, for Malloy it is all part of the plan.
“There are ones that go over, ”¦ but we really try to have an array of under $50 and under $100 (options),” Malloy said. “We ”¦ don”™t keep our inventories too high, making the purchase and the gift more unique. Things move quickly here and we work closely with our vendors. My strategy is test and reorder; I don”™t buy too much of one thing until I know it”™s a proven winner. I might pay a little bit more in shipping ”“ but it”™s worth it.”
