Down and Out Downtown

As the kaleidoscopic Christmas displays began to blink on at stores along the main streets of the nation's cities last week, the mood of the merchants was anything but festive. Downtown retailers are hoping for a holiday buying spree to offset a year of laggard sales and inflation-riddled earnings. Economists are hoping for consumer spending to be a strong force in revitalizing the economy. The prospects for the near future are not promising.

George Katona, head of the University of Michigan Survey Research Center, which regularly polls 1,500 consumers to check on their buying intentions, predicts that Christmas sales will be no greater than last year's. If so, the real volume of goods actually sold could decline by as much as 6% --because most items carry higher price tags than last year. Consumers are saving an abnormally high 7.6% of their incomes; ultimately they will begin to spend considerably more, but Katona reckons that they will hold back until they feel much more secure about the nation's economy and society in general.

Expensive Midi. The downtown merchants--who have to cope with the crime, grime and transport snarls of the central city--are being hurt worst. There are some exceptions; for example, Chicago's Marshall Field and San Francisco's I. Magnin are doing well. On the other hand, in the twelve months ended last August, retail sales in downtown Cleveland plunged 23%; they fell 12% in downtown Philadelphia, 10% in Los Angeles, Baltimore and Boston.

The slump, plus vigorous competition from suburban shopping centers and discount chains like E.J. Korvette and Great Eastern, has led to the extinction of some older stores in the central city. San Francisco's H. Liebes & Co., a women's specialty shop that opened more than a century ago, will shut down after Christmas. Manhattan's Best & Co., a Fifth Avenue landmark, recently sold its lease to a syndicate including Aristotle Onassis; the syndicate intends to raze the building and put an office tower on the site.

Fifth Avenue's famous shops are battling through a difficult period. Late in recognizing the youthful fashion trends of the 1960s, some of the street's leading stores made stabs at enlivening their fashions and sprucing up their interiors. The results, often as unsatisfactory as a dowager in a miniskirt, alienated older customers and failed to win back the young from the flashy boutiques. The quick plunge into the unpopular midi fashions was particularly punishing.

There are plenty of rumors of problems at Lord & Taylor, Arnold Constable and Saks Fifth Avenue. The managements of B. Altman and Bonwit Teller recently took the unusual step of sending letters to their employees assuring them that the stores would not be closed. Meanwhile, on Madison Avenue, Abercrombie & Fitch has been plagued by the common problem of thefts and other runaway costs; the company lost nearly $1,000,000 on sales of $28 million in fiscal 1970.

Willard Bent, the head of a company that embraces Brooks Brothers, Washington's Julius Garfinckel & Co. and other stores, reports that sales are off in part because "downtown stores are just not showing the results that branches are." Stanley Marcus, president of Neiman-Marcus, has made a fortune in downtown Dallas but now prefers locations away from the center. Compared with them, he says, "it takes a lot more effort and advertising to generate downtown business."

"We are fighting for our economic survival," says Jack Meier, chairman of Meier & Frank, the top department store in downtown Portland, Ore. His store's sales have dropped by one-third in the past twelve years and, like many other doyens of downtown, he argues that the central shopping districts will tumble into deeper trouble unless local governments provide more parking space and better mass transit. Adds Dexter Ware, a senior vice president of Detroit's Hudson Co.: "At some point, major cities must recognize that if they want to save the downtown stores, they will have to provide tax relief." Hudson's recently started closing its downtown store earlier at night because of waning business, but its suburban branches have begun to stay open on Sundays to accommodate a rush of shoppers.

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