Retail’s pain isn’t expected to end any time soon.
Orange County could lose 6,500 retail jobs in 2009 for a total of about 152,500 jobs since the recession began, according to the Los Angeles County Economic Development Corp.’s recent forecast.
“People are shopping their closets these days,” said economist and founder Jack Kyser.
The retail sector is third in line for job losses this year, following finance and insurance, which are expected to lose a combined 9,500 jobs, and construction, with an expected 7,500 job loss. Health services and private education services are the only two sectors expected to see job growth this year, according to the forecast.
More big chains are expected to continue closing stores this year, including Starbucks Corp. and Krispy Kreme Doughnuts Inc. Some chains have scaled back growth, including AnnTaylor Stores Corp. and Walgreen Co.
Many cities have more retail than they need because in the past several years cities have aggressively recruited retailers to add sales tax revenue, he said.
Chain stores that aren’t at the top of their category could go out of business this year, according to Kyser.
Smaller mom and pop stores have been quietly shuttering.
But new retail concepts could pop up, Kyser said.
The county could see some Microsoft stores in coming years.
Microsoft Corp. said earlier this month that Wal-Mart Stores Inc. veteran David Porter will lead the effort to open retail stores similar to Sony Corp.’s and Apple Inc.’s stores, selling items such as the
Zune media player and Xbox video game
consoles.
Kyser said he doesn’t expect any mall closures in OC, but Los Angeles, Riverside and San Bernardino counties might not to be as lucky.
Taxable sales in OC are expected to drop 5.5% this year, on top of a 2.8% decline last year.
Luxury retailers, such as Neiman Marcus Group Inc. and Saks Fifth Avenue Inc. have been vigorously cutting prices on luxury goods.
“The age of opulence is over for a while,” Kyser said.
The unemployment rate in OC was about 5.3% in 2008 and is expected to be 7.3% this year, according to the forecast. In 2010, it’s expected to be 7.5%.
Retail sales hinge on total personal income, which is expected to decline by 2.1% this year. Next year, there should be a slight uptick of nearly 1%.
By the end of the year, things could start improving, Kyser said.
Auto Upswing?
There are signs that sales are improving slightly for auto dealers.
Anecdotally, a handful of OC dealers have said January was slightly better compared to December. Whether that trend continues remains to be seen. A sales tax deduction on new auto purchases in the federal stimulus package could boost auto sales somewhat this year, but potential car tax increases from the state budget could put the brakes on any sales momentum.
South Coast Plaza
South Coast Plaza has added an event to this year’s calendar: the Summer Food & Wine Festival. It will be held June 24 and proceeds will benefit Irvine-based Second Harvest Food Bank of Orange County and Someone Cares Soup Kitchen in Costa Mesa.
Also at South Coast Plaza, shoe designer Christian Louboutin will be in the flesh debuting his frilly new $6,295 Marie Antoinette shoes at the Christian Louboutin boutique in the shopping center’s penthouse.
Only 36 pairs of the shoes were made and South Coast Plaza will be the only store on the West Coast selling them. They come in blue, pink and yellow.
Technology Competition
The Costa Mesa-based Orange County Automobile Association’s recent annual technology competition yielded a couple of winners who will now go on to the national competition in New York in April.
Anaheim’s Loara High School seniors Eric Argueta and Luis Loera, part of the North Orange County Regional Occupational Program, won the annual competition, which helps create awareness about auto industry careers.
Auto technicians are in short supply, but the jobs pay salaries of $70,000 to $100,000 annually.
Toyota of Orange supplied the team with a practice car and instructor Russ Bacarella led Argueta and Loera through the fix-it competition, which was held at Hyundai Motor America Inc.’s technical training center in Fountain Valley.
Other dealers participated in the competition, including Allen Hyundai of Laguna Niguel, Hardin Honda of Anaheim, Infiniti of Mission Viejo, Connell Chevrolet of Costa Mesa and Renick Cadillac of Fullerton. The winning duo also received one-year scholarships from the auto association to pursue auto studies and partial scholarships from Universal Technical Institute and Ohio Technical College.
