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Boston retail bouncing back.

With a long tradition of commerce and revolution, the Boston metropolitan area is poised for a retail shot heard 'round the world.

This cultural, economic, and demographic center of New England will have area retailers stockpiling home retailing supplies in the year to come.

The city has a climate conducive to the development of high technology that has been nurtured over the years, yielding higher-income consumers with a penchant to spending. This spells a strong future for a community with a proud past.

Home Goods, The Soul Of The Party

This is no time for tea! While Boston economy staples, the defense and computer hardware sectors, were hit hard in the 1991 recession and are still trying to recover, Tactical forecasts that home furnishings sales figures will continue to be as solid as Plymouth Rock, topping the $2 billion mark in 1997.

The 6.2 percent growth rate for next year, though slightly down from 1996's estimated 6.6 percent rise, will still give many something to cheer about.

This year's impressive growth rate will peak in the first quarter with 7.2 percent, fall to the year's low of 6.1 percent in the second quarter, garner a 6.8 percent increase in the third quarter, and will end with a growth of 6.5 percent in the fourth.

Boston Marathon Of Mall Renovations

Beantown recently found its runner's high with the opening of the 1.1 million-square-foot Solomon Pond Mall in Marlborough, sporting the winning anchors -- J.C. Penney, Sears and Filene's. Next year, a 50,000-square-foot Nobody Beats the Wiz! and a 15-plex movie theater will join the pack. 1996 also brought the reopening of the newly renovated Shoppers' World (725,000 square feet) located in Framingham.

Its anchors include Bradlees. Liberty Tree Mall (750,000 square feet) of Danvers, also completed its renovation and expansion, as did South Shore Plaza (1,370,000 square feet) in Braintree, which houses Lord & Taylor.

The year also saw the purchase of the 1.2 million-square foot Natick Mall, by a real estate investment trust, after $200 million in renovations and a 700,000-square-foot expansion. Soon to open is a $100 million mall at the intersection of I-495 and I-290. Bostonians can shop for their home furnishings needs within the mall's anchors, which include Sears and J.C. Penney.

Runners! On your mark... get set... go! -- to the new 45,000-square-foot Niketown coming to the Back Bay in '97. The new edition will keep this district number one in terms of retail locations. Downtown Boston's retail market has seen heavy action during 1996.

Among the highlights were the several openings in the Downtown Crossing area of retailers such as Loehmann's, Tello's, Borders Bookstore and Marshalls. Also in the works for the area in 1997 is the scheduled openings of a 67,000-square-foot Stop & Shop supermarket and a 60,000-square-foot Star Market.

There were some setbacks to the Crossing retailers, though, with the vacancy of Lafayette place and Macy's intention to offer 208,000 square feet of its property to the office market.

Other big news involved the ongoing rapid expansion of superstores throughout the area. The presence of stores like Wal-Mart and category killers such as Barnes & Noble, and the consumer electronics pros Circuit City and CompUSA, continues to grow.

Target, the nation's third-largest discounter behind Wal-Mart and Kmart, is also looking to penetrate the New England market.

This Colonial town is in the process of reinventing itself, and is experiencing growing pains. An old economy is now having to make way for a newer, more efficient, technology-based system. Boston is still feeling the effect of the decline in manufacturing -- more than 4,000 jobs were lost statewide last year.

The Boston area is also experiencing several large-scale consolidations, corporate downsizings and even some high-profile bankruptcies that have hurt labor. Caldor and Bradlees have already filed for Chapter 11 bankruptcy protection. ITT/ Sheraton, The New England, Stratus Computer, and NYNEX all downsized Boston-area operations last year.

And over 3,000 were left unemployed recently after the mergers of Shawmut Bank with Fleet Bank and Baybank with Bank of Boston. The Stop & Shop/Purity Supreme Supermarket merger is leading to substantial consolidation of New England operations in 1996.

Also, the merger of TJ Maxx and Marshalls is predicted to lead to about 200 store closings nationwide over the next few years. The big-box home improvement retailer Grossmans consolidated its lumber facilities throughout Massachusetts.

The Job Growth Is Coming!

Despite these difficult times, the unemployment rate dropped to 4.8 percent in 1996! One factor that is counterbalancing the downsizing and contributing to the growth is known as the "Big Dig," a new tunnel under Boston Harbor.

It's estimated to have direct job creation approaching 5,000 and indirect job growth extending beyond 10,000. The entire construction project will cost approximately $10 billion by the time of its completion, around the year 2003.

A bill passed earlier this year by the state legislature offers tax reductions to the mutual fund industry, as long as it creates 11,000 new jobs over the next four years.

Ike Lagnado is principal of Tactical Retail Solutions Inc., a multidisciplinary market research and consulting firm in New York City that publishes the Tactical Retail Monitor.
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Title Annotation:Retail Monitor
Author:Lagnado, Ike
Publication:HFN The Weekly Newspaper for the Home Furnishing Network
Article Type:Column
Date:Nov 25, 1996
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