Licensed as Timothy G. Davis, Lic. Assoc. R.E. Broker At The Corcoran Group
The Wall Street Journal-10/22/2010
Winter is usually an uphill battle for businesses along Main Street in Southampton, but the past couple of offseasons have been particularly hard for area retailers, leading to the shuttering of several mainstays.
As a destination for affluent vacationers and those with second homes, Southampton has generated brisk summer business for many retailers, although last summer's results were well below par for the peak season. But this winter, the lagging effects of the economic downturn are taking a toll on Main Street that has included some longtime retailers.
Leading the recent departures is Saks Fifth Avenue, which closed the doors on its majestic brick building, a former site of Southampton City Hall, on Oct. 9 after doing business in Southampton for nearly 60 years.
The company cited sluggish sales as the reason for the closure.
"The Southampton store did not meet the Company's profitability standards," said Julia Bentley, a spokeswoman for Saks, in a written statement. "The planned closing is consistent with our strategy of focusing our resources on our most productive stores."
Locals mourned the loss of a landmark. "I'm saddened?it's been there since I was a kid," said Mary Callahan, 53 years old, who drove to the store from East Hampton, unaware that it had closed. "But I'm not surprised," Ms. Callahan added. "I've been shopping online and only came in for makeup sometimes."
Opened decades before most of the restaurants and boutiques on Main Street, the store had become a fixture in the community. "I did all my Christmas shopping at Saks for years," said Bob Schepps, president of the Southampton Chamber of Commerce.
And just steps from Saks, year-round retailers Marie Chantal, a high-end children's boutique, and Max Studio, a luxury fashion chain, have closed in the past few weeks.
A Max Studio official said the decision to close the Southampton store was a "difficult one, after many successful years," and added that the company was seeking out larger spaces under a new retail strategy. Marie Chantal officials couldn't be reached to comment.
And just off Main Street on Jobs Lane, the Diane von Furstenberg fashion boutique also has closed. While also a year-round location, a company spokeswoman said the Southampton store wasn't intended to be permanent.
The Hamptons, on the southern fork of Long Island, were becoming more of a year-round destination in recent years. But recent economic woes are making it harder for local retailers to remain profitable with only the summer to fall back on.
"It was a seasonal issue during our best years," said Michael Leclerc, owner of Renaissance, a vintage-clothing boutique on Main Street in Southampton for 18 years. "But in the last couple of years, we've had 40% to 50% reduction in sales?we are suffering."
Recent economic woes are a key factor affecting consumer confidence, according to local retailers.
"People who live here are shopping at Tangers [an outlet mall] because even people with money aren't spending the same way they did five years ago," said Joann Hale, a sales associate at Complements lingerie boutique. "It's the nouveau riche that go out and spend without hesitation?Southampton is a lot of old money."
Business experts in the area see a number of different factors bearing down on retailers along the strip, ultimately turning a challenging environment into an impossible one for some.
"Retail in the area had been under pressure from Internet sales, Tanger outlets and high rental costs for years," said Mr. Schepps. "But with the market conditions in the past couple of years, it's a perfect storm."
The effects of the downturn aren't limited to retail in the area. Real-estate listing prices in the town are being slashed by the millions to attract buyers.
"Sellers who've had their properties listed for a while?some at a high price?are realizing nothing is happening," said Janet Hummel, a partner with Town & Country Real Estate in the Hamptons. "Things are not like they were back in '07."
Still, others reason that weak market conditions are forcing sellers to come to grips with reality. A classic estate cottage in Southampton that was originally listed at $17.5 million was reduced to $13.5 million over the summer and was eventually sold at that price in August.
"You can't price your property based on prices from even a couple of years ago," said Tim Davis, senior managing director at Corcoran Group in Southampton, who currently has several listings currently on the market at reduced prices. "No question, prices have come down and in some areas they are 25% to 30% off from the high."
Peter Turino, a broker with Brown Harris Stevens in East Hampton, says the market in Southampton is starting to emerge from a dark period last year. "The story of 2010 is a leveling story," said Mr. Turino, "and that's not all bad considering we were in so much trouble in 2009."
Given the economic climate, local business owners say it is no surprise that discounters are the only retailers doing well.
"Since Labor Day, this place looks like a ghost town," said Karen Leclerk, co-owner of Renaissance boutique. "But you walk into T.J. Maxx in Bridgetown and it's like Christmas in there."