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Oct 12, 2010 6:35 PMPublication: The East Hampton Press

Closings spur concerns for winter season

Oct 12, 2010 6:35 PM

The sudden closing of Saks Fifth Avenue in Southampton Village, gourmet foods markets in Water Mill and East Hampton, and the announcement that the Tommy Hilfiger store in East Hampton Village is going out of business this week has thrown gasoline on already smoldering concerns about exactly how healthy the local economy is, and if darker days are on the horizon as winter approaches.

The East End economy seemed to chug along two years ago as the rest of the country slipped into the deepest economic slowdown since the Great Depression. Now, some experts say, the area might now finally be feeling the effects of what is now being called the Great Recession—just when the overall national economy is technically growing again.

Sunny skies, streets crowded with wealthy summer visitors and a surging stock market, which the past few months have brought, are usually the hallmark of a good economy in the Hamptons. But some watchers of local business aren’t so sure things are as rosy on paper as they seem to the passersby.

“I think we’re going to see a very slow winter, slower than last winter, and it could be hard on a lot of businesses,” said Ann LaWall executive director of the Southampton Business Alliance. “We’re seeing a lagging effect of the economy on the downturn. When the economy was at its worst, we were not. Now we are. More people are hurting this winter.”

In a Hamptons that has increasingly become a year-round destination for second-home owners and New York City weekend escapists—doing away with the once cherished “Tumbleweed Tuesday” effect—some wonder if there won’t be a gradual retracting to the more seasonal resort community feeling of the past, and what effect that would have on local businesses in today’s business climate.

“Even if you have a great summer, it doesn’t mean you can last the winter anymore,” said Marina Van, director of the East Hampton Chamber of Commerce. “Rents are too high. You have to be open and doing business.”

Ms. Van said that a Tommy Hilfiger representative informed her that the company had decided that maintaining the large Main Street store it renovated extensively just two years ago, at the same time the recession was spreading across the country, was not financially feasible on a year-round basis. Instead, the company is considering looking for “pop-up” seasonal space in the area.

While the summer was a good one by most accounts, thanks largely to almost perfect weather, economic concerns in both the year-round and second-home communities might be playing a role in convincing stores like Hilfiger and Saks that the Hamptons are no longer the place to have a flagship store.

“The Saks thing makes me a little bit more worried than just another store closing,” said Henry Hildreth, owner of the Hildreth Department Stores. “It was an anchor for the village.”

The closing of Saks and Tommy Hilfiger, and Citarella in Water Mill and Tutto Italiano in East Hampton, added an estimated 70 workers to the unemployment rolls, most of them local residents. And local unemployment near 10 percent, according to Ms. LaWall, has already meant a cut in the once robust crop of potential winter customers champing at the bit to hit the stores and restaurants they had avoided during the crowded seasons.

And yet there might also be reason for optimism. Several Southampton Village business owners said that they have been told that Ralph Lauren’s stores are making a bid to take over the Saks building, and the Citarellla in Water Mill will be replaced by a new gourmet market operated by Matthew Guiffrida, the chef owner of Muse restaurant, which is next door to the market space.

And, again, the summer was a strong one. After a tough 2009, brought down by the emotional clouds of economic uncertainty and the real clouds of bad weather for most of June and July, the sunny summer of 2010 was a relatively good one for most businesses. There might have been a bit more window shopping and lower check averages at restaurants than some business owners would have liked to see, but the streets were crowded.

The weather might make or break the winter season this year, too. With national economic experts predicting a big holiday shopping season, East End business owners are praying not to see a repeat of last year’s early December snowstorms, which effectively eliminated an entire weekend of holiday shopping just before Christmas. The hard weather last winter also kept second-home owners at bay as well.

“If one has a bad winter, we spend our summer paying for that winter,” said Frank Lenihan, owner of Le Chef restaurant in Southampton. “We’ve had two bad winters in a row now. If one doesn’t have your house in order, it becomes very tricky. A good holiday season is going to make the difference.”

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Lest we forget, there are those who haven taken other jobs not in their field of expertise, to make it. Unemployment helps, but it is usually less than what you would make taking another job. Ofen, the new job pays less than the previous one, and that will put a dent in the consumer market as well, once belts are tightened.

All most of us can do, is ride this out to the best of our ability, and do our best to prepare for whatever rain may fall.
By Mr. Z (11847), North Sea on Oct 13, 10 4:56 PM
1 member liked this comment
Shovel ready projects abound! or do they? Mr. Obama
By bobba (39), southampton on Oct 14, 10 8:51 PM
If the Hamptons want to have a year-round population, then the cost of living must come down. This isn't Wall Street. Most jobs here in the Hamptons are for middle-to-low income individuals, and the cost of renting and home ownership is outrageous.

Bring down the cost of living and we will start spending some of our hard-earned money.
By DogLover (14), Wainscott on Oct 15, 10 7:07 AM
The New Reality...
By michael daly (12), Sag Harbor on Oct 15, 10 9:25 AM
The new economy ...
By Noah Way (450), Southampton on Oct 15, 10 12:59 PM
Its the HOPEY-CHANGEY thing!!!!!
By kpjc (161), east quogue on Oct 15, 10 8:14 PM
DogLover (Wainscott) "Bring down the cost of living and we will start spending some of our hard-earned money."

The problem is with the cost of living so high out here, we rarely have enough to save. Living pay check to pay check is the way it goes, especially for people under the age of 30.
By eelectricmilk (1), sag harbor on Oct 16, 10 11:30 AM
2 members liked this comment
And why is the cost of living so high?

An unregulated, unfettered version of Ayn Rand/Alan Greenspan "free market" capitalism. I got news for folks out there, it ain't free. In fact, it cost us ALOT as a society.

Success is one thing, disparity is another. It's rather rude to tell someone to "pull themselves up by their bootsraps", if they had to sell their boots to pay off a doctor, or some rapist bank.
By Mr. Z (11847), North Sea on Oct 16, 10 12:53 PM
1 member liked this comment
I pay 1400 a month plus utilities for a crappy one bedroom apartment.
And i have extra money for what?
By Yamka (12), Southampton on Oct 17, 10 9:47 PM
1 member liked this comment
Saks, Tommy Hilfiger....... We are several generation locals trying to hold on in a place that has become "East Coast Rodeo Drive" We live here because my husband's family had been fishermen and baymen for generations and to leave would break his heart..... we discuss the possibility often now. What is "upstreet" that is actually a draw to locals? Other than the Hardware Store, the mediocre and very annoying CVS and the disgusting Waldbaums. Thank God for PeaPod! Get some sensible stores in EH ...more
By Lizzy (2), East Hampton on Oct 18, 10 7:24 AM
2 members liked this comment
Agreed. I've only lived here 3 years but grew up in a small Canadian town. The saddest thing to see (and hear about from locals) is the demise of the small local business. So many of these people who have lived in this community for generations having to close up shop because they can't afford the rent and move elsewhere.
By DogLover (14), Wainscott on Oct 20, 10 7:50 AM
The problem is that there have always been TWO economies out here--and they are fairly encapsulated from each other. The bulk of money spent here doesn't stay here--goes back to the city every time a house is flipped. Not too many houses out here are purchased by people who plan to live in them--they are just investments. Same goes for the stores here, not many truly 'local' businesses opening anymore, with few exceptions, just those who are coming from outside in hopes of making a quick kill ...more
By M. O'Connor (147), Southampton on Oct 18, 10 8:50 AM
3 members liked this comment
stop yer whinin. its called LIFE. Mr. Z will bring this conversation right down to sad western song that he can sing in his whisky soup at fellinghams. saks never really belonged here anyway, it was a lark. the ceo must have sold his house. oy vey.
By yessiree (78), Southampton on Oct 18, 10 9:21 AM
1 member liked this comment
Speaking of sad western songs, there was a great one released as a B side by the Eagles in 1976.

It was called "The Last Resort", and lyricized of the overdevelopment of southern California.

Unfortunately, the sad truth is what I write about. I was born here, and spoke out against all that I saw happening which led to this, but "times were good", and I was the wolf crying, "Jonny Raincloud" for it.

I only have one thing to say:

By Mr. Z (11847), North Sea on Oct 19, 10 12:53 AM
1 member liked this comment
Get used to it. Many more to follow. This is what happens when you have a Town that is anit-business, anti-growth, not in my backyard mentality. Moratoriums prohibit entrepreneurs from going into business. Those who are in business and want to improve their establishment have to jumb through hoops just to put up a new sign. Many with good ideas for businesses fail because of the time it takes for approvals. Look at all the empty storefronts. The towns attitude "besides that Mrs. Lincoln, how ...more
By The Real World (368), southampton on Oct 19, 10 1:56 PM
"Anit-business, anti-growth" - what town do you live in?!

We live in Southampton, where the town board never met a develiopemnt it didn't like (Tuckahoe Main Street), the planning board doubles the size of commercial projects AFTER community "input" meetings (Barnes and Noble, Bridgehampton) and the ZBA hands out variances and zoning changes like Halloween candy.

On the other hand the multitude of absolutely ridiculous regulations, the vast majority of which are wholly unenforced ...more
By Noah Way (450), Southampton on Oct 19, 10 5:05 PM
Sorry, I should have said anti- small business. The only ones that can afford the process in the Town are large developers and big box retailers. Small business owners wanting to expand or invest in the town are prohibited by the costs. Your second point is spot on.
By The Real World (368), southampton on Oct 20, 10 11:41 AM