Wall St. Firms Trimming Back Holiday Bashes
As Wall Street’s biggest firms rake in record fees and trading profits, one time-honored sign of a golden age may be missing: the lavish holiday party.
Citigroup Inc., with $17.7 billion in reported earnings thus far this year, and Goldman Sachs Group Inc., in line to be 2005’s biggest mergers advisor, are among the companies that have trimmed December festivities, party planners and caterers say.
Bankers are concerned that self-congratulatory wingdings don’t mix with a country at war, images of disaster victims and rising interest rates. Companies that spent $400,000 or more five years ago for sit-down dinners for 1,000 and singers such as Billy Joel now hold $200,000 buffets ending at 11 p.m., said Joan Steinberg of Match Catering in New York.
“They’re playing it down,” said Steinberg, who has organized parties for clients including Citigroup’s private bank for 11 years. “They’re very concerned about their corporate persona and don’t want to flaunt anything.”
Some Manhattan caterers say the Sept. 11, 2001, terrorist attacks began the decline in bashes tailored for thousands. The following year, Wall Street’s profits tumbled sharply. Now, even as profits have rebounded, big parties remain off-limits.
“We had ‘80s greed and the ‘90s of showing it all off, and then 9/11 happened,” said Nixon Richman, who has organized parties in New York for 20 years. “People almost feel guilty having a good time if they aren’t helping someone.”
The holiday mood this year is qualified by concern about the U.S. presence in Iraq and people still in need after losing homes and possessions to hurricanes Katrina, Rita and Wilma, Richman said.
The five biggest U.S. securities firms by market value -- Goldman, Merrill Lynch & Co., Morgan Stanley, Lehman Bros. Holdings Inc. and Bear Stearns Cos. -- are set to post combined profit of $18.9 billion, up 9.8% from 2004, according to surveys of analysts by Thomson Financial. The 12-member Amex Securities Broker/Dealer index is up 29% this year, compared with the 4.1% advance of the Standard & Poor’s 500 index.
Low interest rates, volatile commodities prices and rising stock markets have spurred the gains at the New York-based companies, analysts say.
“We’re not seeing the massive parties that have occurred in the past,” UBS spokesman Kris Kagel said. Company divisions typically hold their own events, he said.
Executives at several New York-based firms don’t even want to talk about parties. Goldman spokesman Michael DuVally, Morgan Stanley spokesman Mark Lake and Lehman spokeswoman Kerrie Cohen declined to comment on party plans. Citigroup spokeswoman Susan Thomson, Bear Stearns spokesman Russell Sherman and Merrill spokeswoman Selena Morris also wouldn’t comment.
Wall Street isn’t alone in its holiday temperance. The percentage of U.S. businesses holding parties will drop to 87% this year from 95% in 2004, according to 150 companies polled by Battalia Winston International, a New York-based executive search firm.
“It’s significant,” said Dale Winston, Battalia Winston’s chief executive, who started the survey in 1988 as a barometer of U.S. economic well-being. “It reflects the psychology of corporate America -- people are cautious.”
Although big public displays of good fortune are out, bankers are still holding cocktail parties and dinners for smaller groups. Many have booked nightclubs so they don’t have to pay to decorate, illuminate and furnish large, empty party spaces, Steinberg of Match Catering said.
Fizz, a club on 55th Street and Lexington Avenue with a capacity of 450 people, is booked except for two nights from Dec. 1 to Christmas, said co-owner Anthony Coppers. The parties end at 10:30 p.m., when Fizz members and other outside customers are allowed in. Reservations at Fizz include five events for Goldman, one for Citigroup and parties for Thomas H. Lee Partners and Tudor Investment Corp., Coppers said.
The Four Seasons Hotel on 57th Street, which can’t accommodate more than 120 people for dinner, began reserving December parties over the summer, said Brian Honan, marketing director. Such events will bring in 30% more revenue than last year for the hotel, he says.
“The parties are definitely not over the top,” said Riki Lobel, a senior vice president at Paint the Town Red, which has been planning events for 17 years. “Companies are doing weekday events with no spouses.”
Many of Lobel’s clients are spending about the same as last year, although she had not heard from others, she said. Poker and casino games are being offered as entertainment while disc jockeys spin the music. Flower budgets are out.
Caterer Steinberg said she had been ordering honey-glazed turkey with cranberry relish and mashed potatoes to be served buffet-style at nightclubs, including Crobar and Marquee in the Meatpacking district. Some parties are from 6 p.m. to 9 p.m. with passed hors d’oeuvres.
“Money is tight,” she says. “I’m seeing a lot less sushi this year than I’ve seen in a long time.”
