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'94 to herald retail breakthrough.

Retailers who were filled with optimism over last Christmas' successful season, were somewhat disappointed with the first half of 1993. While retailers have been doing somewhat better, there has not been the marked improvement that some had hoped for, and many retailers have fallen by the wayside.

There are, however, some notable exceptions. Bed & Bath has taken the city by storm, helping to revitalize the lower Sixth Avenue retail corridor. Its success has attracted Today's Man and a Barnes & Noble superstore to the area, and other retailers are considering moving to this exciting new retail market.

Fifth Avenue in the 50's has regained much of its lost luster during the Vast two years, though some stores are coming available as a result of bankruptcy or lack of business. For example, Charles Jourdan is leaving the space in Trump Tower that it occupied for several years and Gucci has cut back on one store that has already been leased.

Several major retailers that are already in the metropolitan area market are now thinking of opening in New York City. These include Walmart, The Sports Authority, K-Mart and Office Maxx, all of which are thinking about going into the Coliseum.

If any of these retailers actually carry through on these plans, it would have a major impact on this area. On the whole, the impact would be positive, though the opening of these stores, particularly K-Mart and Walmart, could have an adverse impact among certain categories of retailers whose rent and operating expenses does not permit them to compete with these superstores. Of course, any retailer coming into New York City means more jobs and less unemployment. This is especially true since many industries are still cutting back, especially in the manufacturing sector, while many Wall Street firms remain reluctant-to hire despite record earnings. As a result, the downtown market remains soft and there are numerous vacancies in major shopping areas such as Nassau Street, Broadway and Fulton Street.

The implementation of President Clinton's economic package should give the country a shot in the arm. Though it will take time for the plan to actually make an impact on the budget deficit, it will help the nation psychologically. When consumers begin feeling more optimistic about economy, they will start spending again and provide a much needed boost for retailers. We've already seen good news with recent reports that New York City's unemployment rate is now below 9 percent. New York continues to attract both national and international retailers, and we can expect retail conditions to improve with a real retail breakthrough coming in 1994.
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Title Annotation:Mid-Year Review & Forecast, Section V; New York, New York retail leases expected to increase in 1994
Author:Friedman, Edward A.
Publication:Real Estate Weekly
Article Type:Column
Date:Jun 23, 1993
Previous Article:In lease disputes, negotiating may beat litigation.
Next Article:In 1993, scattered opportunities emerge.

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