Stores Still Await ‘The Big Weekend’
With the economy wobbling and Christmas coming, Faye Karin knew she’d need more than a supply of candles this year to lure customers into the Laguna Beach shop she manages.
She stocked up on Persian rugs and silver dishes, and added some fancy touches--a velvet bench, antique fireplace mantel and small stained-glass windows. But so far, the $10,000 outlay has failed to ring up more sales.
Now, facing this crucial shopping weekend, Karin and other retailers are on edge. “We keep waiting for the big weekend to come, but nothing comes,” Karin said.
Merchants blame a slowing economy, a nerve-racking stock market and a distracting presidential election for helping to sour sales. Indeed, business woes in this coastal city mirror what retailers are struggling with elsewhere--fewer customers, slower sales and early discounts to drum up business.
“The foot traffic has dropped drastically compared to last year,” said Giti Esmaili, owner of the Tango gift shop. “Last year this time, I was not on sale. This year I have 60% off, and I still can’t bring in business.”
Figures released this week by the Commerce Department confirmed the lackluster sales. Excluding autos, retail sales rose a mere 0.2% in November after an anemic increase of 0.4% in October. That was discouraging news for merchants, many of whom do a huge chunk of their business between Thanksgiving and the end of the year.
In response, retailers have slashed prices this Christmas season on everything from jackets and sweaters to jewelry and toys.
“This weekend and next are crucial,” said Richard Baum, an analyst with Credit Suisse First Boston. “This is when it all happens.”
While Laguna Beach businesses get their major sales boost in the summer, the slow Christmas season is raising worries here, especially since sales tend to slow even more after the first of the year. And in an area where store rents can run as high as $10,000 a month, a protracted sales slump is particularly painful.
“The rents are so high in this town that I don’t know how any business can hang on,” said Cindy Obrand, executive director of the Laguna Beach Chamber of Commerce.
Businesses also complain that the locals don’t support them, shopping instead at malls or at large, lower-priced stores such as Target and Kmart in surrounding communities.
To survive, some shops rejigger their product lines, as Karin did for Roya’s boutique. Chicken Little’s is stocking more tourist merchandise, such as mermaid statues and dolphin picture frames, said Janet Cruciana, the manager. Pacific Jewelry & Coin has added more beach-themed products--which tend to tempt tourists and inlanders--including seashell bracelets and crab-shaped earrings, owner John Lujan said.
Little Bohemian, which focused on teen products, has doubled its merchandise and added more clothing for women. The store has also boosted its advertising budget, owner Amii English said. The changes have helped sales, she said, but not profits.
“The money’s going out and the money’s not coming in,” she said.
High-end women’s designer clothing store Novecento boutique felt the slowdown last month.
“The stock market and presidential election really threw people off,” said Laura Stearn Cruciano, the designer and store owner. “You could feel it. They were very confused, depressed, staying home.
“A big majority of my clients have hardly bought anything new for their wardrobe,” she said.
But not everybody is gloomy. Sales have been strong, for example, at men’s clothing store On Board, manager John Dougherty said.
“We’re right in the middle of town on the corner,” he said. For people in less prominent locations, “it’s a tough gig.”
Roya’s is tucked down a pathway on Forest Avenue, the heart of the downtown shopping district. Since decorating the shop and adding new merchandise haven’t helped, Karin pondered Thursday what else she could try.
“Now we are trying to find a new strategy--again,” she said. “What could be the next step?”
Some merchants are expecting more last-minute shoppers next weekend, the last chance to snap up a Christmas gift.
The last time Christmas fell on a Monday, more than 60% of all purchases took place in the last two weeks of the season, the International Council of Shopping Centers said.
For some merchants, what makes them feel best is knowing they’re not alone.
“The first couple weeks of November, I was like freaking out,” said English at Little Bohemian. “But now I’m, like, ‘Misery loves company.’ ”
Bloomberg News contributed to this report.
