Cushioned from the recession at first, Texas' retail market has begun to feel the pinch of the recession. Some analysts say it will bounce back more quickly, while other problems also ensue. Women's Wear Daily took a look.
The Dallas/Fort Worth metropolitan area is 6.3 million strong, with the country's largest recorded population boom in the last two years. That, coupled with the region's diverse economy and extra oil and gas income boost, kept retail's decline at a minimum compared to other states like California and Florida. Jobs were safe all the way to January of this year, and from that point, the increased unemployment rate still hovers below the national average.
Retailers have expressed diverse levels of concern. While Neiman Marcus reps claim a much lighter blow to sales in Texas than elsewhere, Plano-based J.C. Penney has significantly softened their plans for expansion over the next year or so and Stanley Korshak has reconfigured merchandise to lower price points to accommodate for drops in sales that are anticipated to dip as low as 40%.
The biggest problem for DFW, however, is a familar one: a retail space surplus. Despite massive development on the arts and athletics front, which will surely stimulate the economy on the whole, reports indicate a 9.5% retail vacancy rate after 978,000 square feet came onto the market. This places Texas above the national average, something shoppers have probably already sensed as smaller storefronts in retail centers such as NorthPark, Park Lane and Victory Park remain empty. With a cautious holiday shopping season predicted, it's unlikely this situation will change anytime soon.
At least, that is, for the smaller guys. On the other hand, Highland Park Village leasing president Stephen Summers has continuously reported healthy sales, with designers like Tory Burch flourishing as always. NorthPark will open another six top-end designers, including Louis Vuitton, Betsey Johnson and Bulgari.
At this point, all anyone can do is wait and see what happens and if possible, go out and shop away the problems.