Retail 2000: 'Year of Dragon' lives up to its storied billing.

In Eastern philosophy, the year 2000 is the "Year of the Dragon," a year when things are done in a big way: a year when luck prevails. The Year of the Dragon is rowdy year, which, like the dragon, roars, rumbles, flaps its wings, and breaths fire and smoke. So far, the East has been correct: this year has been bumpy, but lucky. Business is great, if restive.

Unemployment has fallen to about 4% and inflation, except for food and energy, has gone down. The Information Revolution has smoothed out the business cycle. Computerization provides monitoring of inventories, so that production never gets too far ahead of sales. High production and competition has controlled inflation. The Federal Reserve has kept the rates down. This is a new economy, one where there are financial institutions which seek and fund innovation. There is a market for ideas, ideas that challenge the old ways.

In Europe, especially France, the retail growth is unbelievable. Paris is again the capital of fashion and luxury for virtually the World. There has been as much action on its boulevards and avenues this year as there was on Madison and Fifth in New York. Everyone wants a flagship in Paris.

Chanel and Gucci are renovating. Missoni opened a flagship on rue Faubourg Saint Honore last month. Faubourg Saint Honore, mainly because of Colette, the temple of hyperchic, has become the center for fashion-conscious youth.

Joseph will be opening its biggest shop there this month. Mandarina Duck will be close by.

At the intersection of the more traditional avenue Montaigne and rue Francois 1, Fendi is opening its first Paris store. On the Left Bank, where many Parisians shop, Miu Miu will have a new store.

Retail space rates are lower in Paris than in New York and London, but are rising and locations are becoming scarce. Paris, along with New York, and London are the locations considered by today's international retailers as significant for success.

Things are great in Milan as well; it remains a retail boomtown. The desire for luxury goods is so great that the traditional "Golden Triangle" of Via della Spiga, Via Montenapoleone, and Via Sant' Andrea is no longer three-sided as other streets: "sides" are added to accommodate new and expanding retail.

High-end designer stores are springing up like mushrooms. Mainstream labels are hurrying to open new stores and spruce up existing ones.

Recently, new stores have been opened by Churchs, Moschino. Missoni, Roberto Cavallo, and Antonio Fusco. Louis Vuitton, Yves Saint Laurent, and Prada will open flagships soon.

Giorgio Armani's new store on Via Manzoni not only features Armani and Emporio clothing, accessories, and perfumes, but a restaurant and sushi bar and a flower store.

Tiffany & Co. recently opened a second store in Milan on the Via della Spiga.

The Japanese yen has been growing and its relation to the American dollar has remained narrow and steady, without much change. The Japanese are shopping again.

Meanwhile, back home, home furnishings continue to be the hottest trend. Firms such as Baker, Ligne Roset, and Restoration Hardware continue to expand, because of the strong residential market

In New York, the old neighborhoods are still going strong. Many retailers will consider no other location than Fifth or Madison Avenues. Givenchy moved but remained on Madison. Shanghai Tang returned. Selima Optique came to Madison Avenue as did Anne Fontaine, Ann TaylorLoft, Links of London, Michael Kors, Celine, Steuben, Carolina Herrera Ventilo, Oliver Peoples, Graff, Chatila, Eres, and TUMI.

On Fifth Avenue, Fossil opened, as did Hennes & Mauritz. Louis Vuitton replaced Christian Dior. Gucci reopened. As of this writing, Club Monaco has taken over Bijan's location, and Crane & Co. opened in Rockefeller Center. Nautica and Kenneth Cole will open there soon. Next year, Hugo Boss and Escada are scheduled for Fifth, almost simultaneously. Escada's store on East 57th Street will become part of Burberry's expansion. There is one cloud in the sky, however. Warner Bros. announced that it would be leaving the corner of 57th Street and Fifth Avenue next year. Bye bye, Bugs.

The migration to Soho continued. New denizens of the area include Olive & Bette's Liza Bruce, Nanette Lepore, Sigerson Morrison, Tommy Hilfiger, Scholastic (Harry Potter) Chanel, H20, Camper, Nancy Geist, and Kerquelen, among others.

Nolita is also expanding: another Calypso, Henry Lehr, with two stores, Ghost, Creed, Fresh, Inc., Le Tanneur, Mark Schwarz Shoes, Bill Amberg, SCO (Skin Care Options) and TSE Surface.

Other areas are attracting retail attention: Madison Square in which there is a dearth of exciting retail, but an enormous office population, new hotels, and great restaurants. The Square itself is undergoing a $5 million renovation.

The Garment District has recently been attracting many businesses other than clothes and also offers great new retail possibilities. It has a unique location -- between Times Square and Macy's; and Penn Station and points east in Manhattan. Both neighborhoods are beginning to emerge.

Last year I wrote that the hotel industry had over-expanded and that little new growth could be expected. Fortunately, I was incorrect. During the last year, New York has had the highest hotel occupancy in the nation. Twenty new hotels were under construction as of June 30. According to the American Hotel & Motel Association, the New York market is just a reflection of the entire U.S. hotel industry, which did $22 billion in pre-tax profits in 1999.

Not all the hotels are in the high-end market, either. In fact, Ian Schrager's new hotel on the West side, The Hudson, is definitely for those with a budget. Singles are $95 and doubles start at $175.

There are reports that Mr. Schrager is considering retail. He plans to open hotel stores, the first will be in the Hudson. The merchandise will reflect the Schrager style hotel life and life in general ...

That's the Dragon Year so far. It won't be over until the end of January. After that is the Year of the Snake, also known as "the Little Dragon"...