Summit Notebook

The Nina Kampler manifesto: don’t waste space, buy less stuff

Sometimes it’s refreshing to meet people like Hilco Real Estate’s Nina Kampler. They work up to their eyeballs in finance, debt, bankruptcy and the business of making and salvaging profits, yet think that there is more to life than money and private enterprise.

Kampler, who runs the retailer real estate group, visited us at the Reuters Consumer and Retail Summit on Monday, and talked about all sorts of business-y topics that we love to write about on our wire. But on this blog, I’ll highlight one or two of her more interesting thoughts about public spaces and how people shop — ideas that seem to exist in opposition to the profit motives of, well, everyone who’s in business.

We talked about some strip malls and other kinds of retail properties along busy highways that have lost many of their tenants to bankruptcy or economic malaise, and now look depressing, dark and empty. Kampler’s idea? Give it back to the people.

“There is so much emptiness going on in the big spaces. … You’ve been hearing the same things for years: the churches will use it, bowling alleys, non-traditional uses. It’s not exactly happening… Weedy lots could be turned into productive-use and public work programs.”

We also talked about our lives as consumers, with a focus on what it really means to be a “consumer.” Sometimes, when people examine their own habits, they discover that “consume” is what they do all day long:

Kampler discovered this on a routine trip through the attic after packing one of her children off to college: “When I examined the contents of what I acquired, it was nauseating. We are over retailed because we are overstuffed. T-shirts and toys and books and serving platters… We keep shopping like the world is coming to an end. … If we made everything special and had fewer of it, the better stores selling product that would last…, we wouldn’t drown in junk and would have more time for important things like relationships and health… Buying stupidly isn’t a smart way to live.”

You say you want a revolution? Here’s one way to start.

Ethan Allen fills up its (tastefully upholstered) bench

The recession wasn’t kind to Ethan Allen’s manufacturing plant workers, but now that the economy is recovering, so are the employment rolls. Last year, the Danbury, Connecticut-based furniture maker and retailer slashed its manufacturing workforce by about 30 percent, Farooq Kathwari, the company’s chairman and chief executive, told the Reuters Consumer and Retail Summit in New York on Monday. That included closing a plant or cutting jobs in Chino, California; Andover, Maine;  Orleans, Vermont and elsewhere.

I could not pinpoint exactly how many jobs he was talking about, and Kathwari did not immediately have the numbers handy, but according to the Ethan Allen website, it looks like they lost 65 workers in Chino and about 320 in Maine and Vermont. Meanwhile, the company said in 2009 that it planned to add some 300 more jobs to its larger facility in  North Carolina, where it had 540 employees as of a year ago.  The published numbers suggest that Ethan Allen cut a little more than 40 percent of its manufacturing staff, while Kathwari at today’s interview said it was about a third. Either way, he told us, “In about six months, about half have been added back.”

At a time when lots of economists and experts are telling us that we’ve been experiencing a “jobless recovery” in the United States, it’s heartening to hear that there’s at least one place in this great, big country where you don’t have to worry about how you’re going to afford that $2,000 tango louver door armoire when, instead, you can build one yourself.

(Photo: Reuters)

Q+A with Corcoran CEO Pamela Liebman

I sat down with Corcoran CEO Pamela Liebman after she came in for the Reuters Global Real Estate Summit and spoke with her about how she got into the real estate business and why she’s stuck with it for so long.

Where did you grow up in New York? Staten Island. I went to Curtis High School

Do you live still in New York? I live in Warren, New Jersey and have another home in Miami, Florida.

Why did you leave? My husband wanted to live outside Manhattan. We are both very passionate about our outdoor activities and we like to be close to our golf course.

But you lived in the Manhattan before you were married? Yes, on the Upper East Side. 77th and Lex.

Do you have pied a terre in the Manhattan? No, I stay in hotels if I have to spend the night. I’m staying at the Mark this week. I love hotels.

Which one is your favorite? The Regency. Probably because it is a block away from my office. But, I also love the Peninsula because of the spa and gym. And I like the Soho Grand when I am downtown. The next hotel I want to check out is the Crosby.

Living wages at Xanadu Meadowlands? Think again, New Jersey

Do not expect the developer that’s working on the massive Meadowlands shopping and entertainment complex in northern New Jersey to compel its tenants to pay their workers a living wage. Related Companies, the New York-based real estate developer behind the project, said on Tuesday that it would be a deal breaker.

We talked to Stephen Ross, Related’s founder, chairman and CEO at our Global Real Estate and Infrastructure Summit, and after a while, talk turned to the stalled project, slated to open in 2011, four years after the 2007 planned opening date. Among other things, we learned that the name “Xanadu” isn’t happening anymore. Related, which took over the project after a bunch of lenders dropped out, has a list of other names, but wouldn’t share them with us.

The most interesting thing that I heard is that Related would not force stores at the complex, located in East Rutherford, N.J., by Giants Stadium, to pay living wages to their employees. While a minimum wage is the lowest hourly, daily or monthly wage that employers must pay, a living wage is what is considered the lowest amount of money that someone requires to pay for shelter, clothing and other basic needs. Here’s what Ross (incidentally, the 95 percent owner of the Miami Dolphins football team) said about that:

That would be a deal breaker for any retail development. … People earn tips. The large retail tenants have a different wage scale that they pay. I think the most important thing today is creating jobs.

Ross shared more with us on this thought. He referred to the Bronx’s Kingsbridge Armory project,  a plan to convert the Eighth Regiment Armory building to a shopping mall that fell apart after the New York City Council tried to get Related to do the same thing. Ross contemplated the notion that the New York City government could try to make a living wage commitment a legal requirement:

I think that would be disastrous for New York. It would certainly be vetoed by [the Bloomberg] administration. Looking ahead, it might sound good for a politician or a labor leader, but I don’t think they’re thinking ahead or have very much vision about what’s happening in the world today.

Of course, politics and business are about compromise. Maybe New Jersey and New York could consider passing a law that requires retailers to place tip jars at strategic points throughout their stores.

‘Take Me out to the Racetrack?’

The bulk of our conversations at the Reuters Global Real Estate and Infrastructure Summit deal with, well, real estate and infrastructure. On Tuesday, however, we got onto the subject of horse racing. Our guest was Gregory Cross, a lawyer at Venable LLP. He is the head of Venable’s bankruptcy practice and represented the state of Maryland, a creditor of Magna Entertainment Corp, which runs the Pimlico Race Course in Baltimore and its famous Preakness Stakes horse race and filed for bankruptcy in 2009.

We asked Cross what could help ailing racetracks improve their financial performance. His answer? A little less Damon Runyon and Dick Francis, and a little more Black Stallion and National Velvet — crossed with Field of Dreams.

“Frankly, I think if you had a track and made it more of an environment where people could go with their kids and sit in the box where it’s like a baseball game and it’s a festive event, I think they could market it,” Cross said.

Now that’s something we can get behind. The kids can learn crucial numbers skills and acquire a more diverse vocabulary, not to mention handy terms like, “boxed bet” and “breakage.” And don’t forget, parents, you can build a whole atmosphere of fun around taking the kids to the track — you can even start at home with fun introductory movies like, “The Long Good Friday” (yes, it’s dog racing, not horse racing, but you get the picture) and “The Grifters.”

(Photo: Reuters)

LeFrak: We’ve been bunting for years

Watch out for Richard LeFrak when he’s at bat and you’re in the outfield. He has a tendency to bunt.

This is a funny baseball technique to use when most executives spend their time trying their best to hit home runs, but LeFrak Organization‘s chairman, president and CEO says it’s worked for his real estate empire, so there’s no need to stop now. When we asked him at our Reuters Global Real Estate Summit why his company didn’t borrow a ton of money during the real estate boom, he said:

We did not want to be seduced by market conditions. My children like to kid me — Every time you get up to the plate, you bunt, and we’ve been bunting successfully for a hundred years. As a result, I’m not interested in changing the methodology that’s worked so successfully.

LeFrak, grandson of Harry LeFrak, who started the company in 1901, took a similarly cautious approach to resort hotels, which he also talked about at his summit appearance on Monday in New York City:

It’s way out on the risk curve. … It sounds glamorous, but boy, you gotta have a strong stomach for that. It depends on a lot of discretionary spending –- corporations willing to step up and do outings and have meetings in places that may or may not be looked favorably on by their shareholders… The whole notion of saying, “I’m going to take my top producers to Hawaii” may not be, let’s say, that robust.

LeFrak talked about meeting people who’d built big luxury resorts on Caribbean islands like Anguilla, including some places that might not always have up-to-date infrastructure, like an airport that can handle moving lots of people onto and off the island.

When you ask, how do people get here, they shrug their shoulders. There’s opportunity in that space, but it would be a departure from the way I would like to think and how our executives like to think about how we would spend our money.

That’s rich. I meant the wine.

What do gold and wine have in common?

Price.

Well, too high of a high price, according to Jeffrey Rubin, director of research at Birinyi Associates, the stock market research and money management firm.

Rubin told the Reuters Investment Outlook Summit on Tuesday that he thought gold prices were “certainly a little frothy” at current levels and that he would rather be a buyer of the gold miners such as Newmont Mining Corp, Barrick Gold Corp, or Freeport-McMoRan Copper and Gold Inc. Gold hit an all-time high  above $1,250 an ounce on Tuesday as investors piled in due to fears that European credit contagion could lead to a double-dip recession.

Rubin isn’t expecting a double-dip U.S. recession, saying the chances are slim. He also felt stock prices were likely near a bottom. Not so for the price of a wine? A good year is already priced in, so to speak.

In the spirit of austerity, we asked Rubin what personal spending he might curtail. For a wine collector with a 1,500 bottle collection, the answer was bitter.

Q+A: Maria Fiorini Ramirez

I sat down with Maria Fiorini Ramirez today after she joined us at the Reuters Investment Outlook Summit and asked her about starting her own company — the global economic consulting firm Maria Fiorini Ramirez, Inc — her advice for young entrepreneurs, and if women can balance a successful work and home life.

Where you were you born? Naples, Italy

When did you come to the U.S? 1960. To East New York.

Did you go to high school there? Yes, St. Michael’s. An all girl’s Catholic school.

Where do you live now? Far Hills, New Jersey

Did you ever think that you were going to start your own business? Yes. And a global one because I always liked geography and history.

Ritholtz: I zig when everybody zags

The U.S. economy is experiencing an ongoing but slow recovery, says Barry Ritholtz, director of equity research at Fusion IQ. But that’s not stopping him from enjoying discounted prices in a low-inflation environment, at least when it comes to his personal spending habits. The world is on sale if you’ve got the money to spend, he told the Reuters Investment Outlook summit in New York when asked, for example, if he might spend less while on a vacation or forego a purchase or two.

“I am an enormous counter-cyclical spender. At the top of the bull market I don’t want to buy anything. I am a seller into a bull market. We have been buying a ton of stuff over the past year. We got two new cars long before the May…. so we picked up two new cars. We’re doing work on the house. We’re adding a kitchen. I got my wife a very lovely birthday gift. She got me a very lovely birthday gift. We’ve been buying artwork. We’ve buying jewelry. I love to buy stuff when it is on sale. I hate to buy top dollar for it.

“So, we just were in the Cayman Islands on vacation some time ago. We were in Aruba back in December. I’m heading to Vancouver in July and probably take a week or two in the Hamptons. I’m thrilled to spend money in this environment.

“I got an e-mail from a client in the heart of ’08 saying the advise and commentaries have been great but you’re just so relentlessly negative in ’08, you’ve got to say something that makes me not want to commit suicide.

“I said stuff is on sale, go buy stuff. Go buy collectible automobiles, artwork, jewelry. If you want to buy real estate, you are probably early, but if you find a unique property, and as we have seen with some of these so-called trophy properties they’ve come down in price but they don’t plummet the way some condo in Miami is going to plummet. If you find something you really want to get, buy it now. Don’t be afraid to make low-ball bids on artwork. If it is $15 million up from $8 million, bid six and you might get surprised by what happens.

“In this environment I’m happy to tell people, if you can afford it, don’t go out and borrow against the house, don’t leverage yourself, but if you have the ability to go out and spend money and there are things you want and they are significantly discounted from where they were three, four, or five years ago, why the hell not? I would much rather spend when things are cheap than pay up when things are expensive.

from Shop Talk:

Check Out Line: Luxury chains facing dilemmas

Check out the challenges before the luxury sector:

Many fancy European companies like Valentino have widened their entry-level offerings to lure more shoppers, given how edgy the global economy remains.  This could be shortsighted, experts said this week at the Reuters Global Luxury Summit in Paris, New York, Dubai and London.

For instance, Valentino's 300 euro T-shirts are dubbed "Couture T-shirts" a term some in the industry view as an oxymoron and could harm the cachet so essential to luxury's appeal.

But to be fair, how much choice do these purveyors of expensive watches, suits, cocktail dresses really have?  

There will always be mega-millionaires to boost the luxury industry and buy $50,000 diamond necklaces at Tiffany. But luxury got a big lift a few years ago from aspirational shoppers, or consumers pretending to be part of the jetset, if only for an hour or so while they buy a new suit at Barneys. And those shoppers could take years to come back, Reuters' guests said.

That shrunken shopper base has forced a number of top European brands to look elsewhere including the United States, where they are hoping shoppers' tastes are growing more refined. But China, and its emerging professional class are also top of mind, despite that country's difficult bureaucracy. 

Still the tentative recovery hasn't stopped the luxury industry's CEOs from splurging. One CEO bought himself a 4.5 million euro house in Ibiza.