There’s a sense of tempered optimism and relief among retailers for 2010.
They’re betting next year only can get better than 2009, the worst year for the industry in a generation.
“So many people are going to be so happy that 2009 passes,” said Robert Cohen, executive vice president and head of the Los Angeles office of New York-based Robert K. Futterman & Associates LLC, a retail leasing brokerage and consultancy.
“Hopefully the worst is behind us and we can move on.”
Consumer spending is projected to gradually improve throughout 2010, according to Chapman University. Retail sales in the county are forecast at $39 billion, a 3% rise from the estimate for 2009.
Retail sales include auto, restaurant and furniture sales.
In 2009, retail sales are projected to fall 3% from a year earlier to $38 billion.
A turnaround hinges on a return of jobs and housing.
The county is forecast to continue shedding jobs in the first half of the year and end 2010 with a subtle gain of about 1,000.
“Job numbers are always a big concern,” Chapman economist Esmael Adibi said.
Personal income is expected to rise 2.5% next year, compared to 2009 when it fell about 1% from a year earlier.
The projected increase next year is modest versus 2006, when personal income here rose 7.7%.
“Those days are over,” Adibi said.
Retailers are expected to make do with fewer workers next year.
They’re projected to employ about 145,300 people, down slightly from the estimated 146,210 in 2009, but down significantly from 2007’s 161,175.
Retail leasing is expected to pick up next year after a dismal 2009.
Lured by relatively low rents, leasing started improving in September.
“These tenants are enjoying the fact that rents are down to 2002, 2003 levels,” said Cohen.
Rent cuts likely have bottomed out, he said.
“For the better markets we’ve reached the lows,” Cohen said.
Luxury retail leasing stands to be slower to recover, he said. Landlords of high-end shops still may need to lower rents.
Store closures also are expected to be fewer than in 2009.
“The worst is behind us,” Cohen said.
RETAILER TO WATCH: Pacific Sunwear of California
2010 will be critical for Anaheim-based mall retailer Pacific Sunwear of California Inc.
The seller of clothes inspired by surfing and skateboarding goes into the year with a new chief executive and a plan to revive the ailing company.
Gary Schoenfeld, who joined in June and turned around Cypress-based Vans Inc. before its 2004 sale to North Carolina’s VF Corp., is looking to promote big brands, improve customer service and sell more belts, wallets, sunglasses and other accessories. He’s also bringing back shoes.
Schoenfeld has his work cut out for him. Pacific Sunwear, which runs some 900 stores, has been in a slump for the better part of two years.
And things are going to get worse before they get better: In November, Pacific Sunwear warned of a bigger loss than Wall Street expected for the three months through January.
Analysts forecast another year of losses and falling sales in 2010.
The company’s biggest challenge could be in winning back young shoppers who have deserted surfwear for edgier, urban fashions sold at rivals Zumiez Inc. of Everett, Wash., Philadelphia’s Urban Outfitters Inc. and City of Industry-based Hot Topic Inc.
Schoenfeld is optimistic.
“We can be teens’ favorite place to shop,” he said in a speech last week. “A lot of us remember when we had that position in the mall. PacSun needs to be and can be that leader again.”
—Sherri Cruz
