Observations From My Semi-Annual Trip to the Mall

In light of our recent lack of posts (and 1-2's still-missing computer), this past Saturday I sucked it up and went out to New Jersey to check out the action at one of the more popular area shopping malls, Garden State Plaza in Paramus.

First though, I just want our dear readers to understand that I consider going to a mall (especially such a monstrous/crowded one) on roughly the same level as getting a Brazilian bikini wax - if not worse - but in the interest of research (er, "research"), I rolled up my  sleeves to see the story first-hand.

My observations, in no particular order, below:

• Parking lot (~10,000 spaces) is PACKED.  Takes me at least 10 minutes to navigate to the far-end just to park in the absolute boonies, because its ridiculous to drive around for 45 minutes waiting for a closer space (another story for another time).
• There is jailbait EVERYWHERE.  At least I presume its jailbate, which is probably the safer bet.  I digress...
• Walked past, and unfortunately into, Aldo.  When did it become the status-quo for stores to blast annoying music at ear drum-destroying levels?  I walk out of Aldo purely for this reason alone (although their selection was nightmarishly weak enough to have forced me to leave anyway).
• Notice that there are roughly 3 people in Zumiez.  Make note to self to short stock on Monday (oops, didn't place the order, stock's down ~10% d'oh!).
• Walked into Abercrombie & Fitch.  Obnoxious, obnoxiously loud music.  Store reeks like all merchandise has been treated with Abercrombie Cologne. Store isn't too packed (although I'm in a daze from the 1-2 Knockout (excuse the pun) of the olfactory and auditory assault.  I stop to ask an employee (who appears to be some sort of manager-type?) if she's noticed any change in sales, etc.  She doesn't understand what I'm talking about or why I'm asking (huge surprise).  After explaining myself, she rambles on about how everything seems normal to her.  I discount this information appropriately.
• Holister - which similarly blasts quasi pop/rock music - is far busier than Abercrombie.  I wonder how people figure out what looks good in a store that has about as much ambient light as a cave in Afghanistan.  Crowd seems to be high school-to-college aged.  I realize that I am old, start to tear-up, and walk out with my head down, hopefully before any of aforementioned jailbait notices.
• The Gap is pretty empty.  I note the store location is on the side of the mall with the least amount of traffic and wonder to what degree this is the cause.  Walk into the store and realize the answer is probably somewhere between "not at all" and "zero".  There goes the idea that consumers are rotating their apparel purchases away from the more-expensive Abercrombie-type stores to more discount retailers like Gap, Aeropostale, etc. 
• Banana Republic was about as crowded as I remember it being any time I've been in one of their stores over the past 2 years or so, maybe a little less.  I notice the price-creep on many of their items ($100+ for a button-down??  $400 for a sport coat?  At Banana?  Huh?).  There are many items on sale at ~25%.  Fitting-room attendant stares at my butt as I walk by with a look that made me feel violated; I now understand what girls must feel like all day.  Regardless,  I buy a pair of summer chinos and a t-shirt thingy.
• Who designs these places?  They must be pretty smart, what, with putting every store I want to go to on complete opposite sides of the mall.  Touche to the planning folks at Westfield (or chance, whatever). 
• American Apparel's ad for its new store - presently under construction - is scandalous.  I think how strange the CEO, Dov is, yet at the same time can't help but think that he's kind-of awesome.  Being the upstanding citizen I am, I question whether the girls featured in APP's ads are all of-age, yet decide any responsible company would have obviously checked such things so it must be OK to look.  Again, I digress...
• Sharper Image still looks to be operating as if everything is all fun & games.  No signs of any bankruptcy (or other) sales.
• Brookstone is EMPTY.  I mean E-M-P-T-Y!  As in, nary a soul, save the washed-up looking salesman.  Note to self: Find way to profit off inevitable bankruptcy filing.  Corollary: Consider shorting Tempur Pedic (although its already pretty-much in the crapper).
• 25% off shoes and other stuff at Kenneth Cole.  The hook works, I'm sold, ring up a new pair of much-needed shoes.  I wonder why this particular act is so exhilarating for members of the fairer-sex.  I am stumped, and move on.
• Can't...Find...Strength...To...Enter...Department...Store...Self...Preservation...Instinct...Too...Strong.

All things considered, I was a bit surprised at my findings.  Prior to my adventure, my investment thesis was to go short the U.S. Consumer.  However,when I left the mall I was admittedly concerned that this view might be incorrectly pessimistic.  Upon further analysis though, I realize that Bergen County, NJ wasn't exactly the epicenter of the subprime meltdown, and might not be very representative of the rest of the Country as a whole, being that it ranks somewhere in the top-20 Counties in terms of per-capita income.

In-all, and purely from this one experience, I'm inclined to believe that retailers are discounting merchandise (and shifting focus towards more discount items to drive volumes/keep inventories in check/etc).  I'm skeptical of analysts who purport that certain retailers are "defensive" plays as consumers move to more affordable alternatives than their more-expensive 'staples' of the past.  I'm massively skeptical of growth stories (see LuLu Lemmings) in this environment.  Minus the likely one-time boost retailers will get from tax-refunds and "stimulus" checks in the coming month-or-so, I see the slow-down in consumer spending lagging other recessionary indicators.  I'm also either massively long (or short, depending on which is the legal trade) jailbait.  If someone could come up with a security to monetize it, they'd make a fortune.

Disclosure: Anal_yst is short Aeropostale.  Anal_yst, 1-2 Knockout or its affiliates do not speculate, nor do they have any open positions in jailbait.  Consult your financial advisor.

Comments

[JT]

what a waste of my time

[Arbitrageur]

Just play it safe and buy jailbait calls expiring on their 18th birthday. I'm sure some of the parents hurt by subprime will be willing to make a market (hey, better to theoretically pimp out your kids than move from a house you can't afford to an apartment and give up your Bimmer, right?)

[Calgary Schmooze]

Hollister... haha... exactly my sentiments when I was at the Galleria in Houston 2 weeks ago.

[publius]

Stores for teens blast obnoxiously loud bad music because it is extraordinarily annoying to the older generation, while their target audience finds it hip. Thus, parents would rather simply give the credit card to Junior to do her own shopping, who inevitably spends more than she would have if mom was there.

[guest]

chance? ha-they put cinnabon where they calculate you need a breather

[Anal_yst]

Thank you publius - its so simple, yet so genius!

[Bugs Meany]

Word. The jailbait in malls is out of control. At 27 I can hardly take it, so are today's 15 year old guys just abusing the hell out of themselves at every opportunity?

The Natick Mall (a.k.a "Collection") in Natick, Mass., is AMAZING from both a research and jailbait POV.