Las Vegas Sun

March 29, 2024

Value-oriented retailers stand out

ICSC

Steve Marcus

ICSC: Conventiongoers browse the exhibit floor of the International Council of Shopping Centers RECON 2009 show at the Las Vegas Convention Center on May 18.

The Retail Runway event that kicked off RECON, the International Council of Shopping Centers global retail real estate convention, focused on some of the bright spots in the industry — companies that have managed to do well despite the economic downturn.

Featured retailers included Wal-Mart, Auto Zone, Dollar General, Dunkin’ Brands, Panera, Pinkberry, Darden Restaurants, Payless and Stride Rite.

Former Vice President Al Gore had been touted as a guest speaker by the council, but was a no-show and his absence was only briefly addressed by Mary Lou Fiala, the 2008-09 chairwoman.

“For those of you expecting to see Al Gore, the inconvenient truth is that he won’t be here,” said Fiala, also the chief operating officer of Regency Centers in Jacksonville, Fla.

It was significant that the retailers identified as success stories this year were not the trendy boutique businesses that have made a splash in recent years. There were no high-end fashion retailers or upscale restaurant chains represented. Instead, the runway was dominated by companies that focus on value.

Darden Restaurants is best known for making Italian food, steak and seafood affordable for the masses with its Olive Garden, LongHorn Steakhouse and Red Lobster restaurant chains.

Auto Zone is thriving, in part, because the sagging economy and high unemployment rate have people repairing, rather than replacing, their cars.

Payless and Dollar General have long been recognized as value brands and Wal-Mart practically invented the concept.

Of the runway retailers only Pinkberry, the frozen yogurt company that has taken New York and Los Angeles by storm, could be considered trendy.

Maybe it was more than a coincidence that council President Michael Kercheval came onstage to the Lenny Kravitz song, “Fly Away,” which includes the lyrics “I want to get away.”

To his credit, Kercheval did not get away from the tough issues facing the retail industry. He acknowledged that attendance for RECON, estimated at 50,000 last year, would struggle to reach 30,000 this year. He also said the retail industry faces serious challenges in the upcoming months, but that the council has both the resolve and the financial resources to help its members get through the tough times.

“We’re not letting up on our collaborative effort to bring credit, liquidity and philosophy to the world’s financial markets,” Kercheval said. “In short, ICSC has been and is prepared to navigate through this economic environment.

With no debt and a reserve fund of $35 million, Kercheval said the council will use that money in the coming year to provide the programs and services its members rely on.

The kickoff event set the tone for what industry observers say will be a much different RECON. The decrease in attendance was primarily attributed to smaller contingents from the attending companies.

As a result, those who came were expected be more single-minded than in years past, with a game plan for business that would be strictly adhered to.

Observers say there was a noticeable decrease in the number of cocktail parties and mixers, an indication that networking has taken a back seat to deal-making.

“There is a very different tenor this year,” said Pamela Joy Ring of Las Vegas-based Ring Retail Advisory. “Retail is sorely underrepresented and real estate bravado at least is tempered with honesty.”

Despite reports that financing would be hard to come by, Ring said there were plenty of conventiongoers engaged in serious discussions on the convention floor.

“I am trying to figure out if there is no money espoused, why is there a preponderance of people sitting in those convention booths conducting entranced conversations,” Ring said.

The answer may be that money may be starting to trickle back to the retail sector, just much more cautiously than in the past few years.

The real estate markets have undergone a correction and what analysts are calling a “thinning of the herd” caused by the recession, which has eliminated some of the more casual players in the retail industry.

The result could be the beginning of the much-anticipated resurgence of retail.

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