Slowing economy casts pall on LV retail conference

Wednesday, May 23, 2001 | 11:01 a.m.

The softening economy put a pall on the International Council of Shopping Centers annual conference in Las Vegas this week, with retail real estate managers reporting the softening economy has sharply curtailed demand for store space.

Reis Inc. reported occupied space in malls and shopping centers in the top 50 markets fell in the first quarter by 5.8 million square feet -- the first quarter of negative absorption since 1992.

"In all categories absorption came to a complete halt. The decline was massive," Reis President Lloyd Lynford told the Wall Street Joural.

Retailers are struggling. For example:

* Kmart Corp. last week reported a first-quarter loss of $10 million compared with a year-earlier profit $22 million.

* J.C. Penney and Home Depot last week reported flat sales and stagnant or declining profits.

* Dillard's Inc. stock fell $2.02, or 10 percent, to $17.50 this morning after the department store chain reported first-quarter profit from operations of 30 cents a share. It was forecast to earn 33 cents.

* Upscale retailers Neiman Marcus Group Inc., Saks Inc., and Tiffany & Co. all reported lower earnings this week.

The reason for the declines is obvious. The U.S. economy is slowing down and people are worried about their jobs, so they spend less.

Consumer confidence in the U.S. economy fell in April, matching a 4 1/2-year low and reflecting reduced optimism about employment, according to the survey by the Conference Board, a New York-based research group.

Only a few retailers, notably Wal-Mart and Target, reported stronger results this month as these discounters appealed to price-conscious consumers.