Faith Hope Consolo has spent 25 years brokering deals on retail space and advising retailers -- including Godiva (NYSE:CPB - News), Asprey, and Fendi -- so she knows firsthand how the U.S. financial crisis is handicapping her trade. "This landscape is different from any downturn we've had," says Consolo, who is chairman of retail leasing and sales for Prudential Douglas Elliman Real Estate, based in Manhattan. "There have been times when gas prices have been high, but not with a mass housing crisis, too. And the credit restrictions are making people uncomfortable about purchasing anything in general."
This Christmas, consumers 18 to 24 year expect to spend $50 less on gifts than they did last year, and consumers of all ages say they plan to reduce spending on gifts for their families, according to the National Retailers Federation. "It seems that in general there has been deterioration in sales that were already weak since September," says Jason Asaeda, a retail industry analyst at Standard & Poor's Equity Research. "Our outlook for the holidays will not be that great."
Consolo, the broker who first brought the clothing chains Zara and Mango from Spain to the U.S., recently spoke with BusinessWeek's Rebecca Reisner about how businesses can keep their sales team's morale and quotas up despite the economic meltdown.
How does the financial crisis affect retail?
I've talked to my retailers at all price points, and they say people are purchasing less. People who would purchase three pairs of shoes are now buying one or none.
How do you motivate your salespeople in lean times like this?
I tell them: Look at this as an opportunity. They need to let prospective clients know that while it may not be the best time to be a retailer, it's a great time for retailers to lease a property or purchase a building. This time a year ago, we had 50 offers for a space, and now we have 12. Today there are fewer customers vying for the same space. I tell my retail clients: "We're going to get you a favorable deal -- a longer lease and good price."
And when I'll see salespeople who are unhappy and struggling, I say: "Do not give up. We may not do this today, but maybe it will be tomorrow."
How about some advice for managers in all industries as far as guiding salespeople during the recession?
Managers need to let salespeople know that when you cannot rely on the economy, you have to rely on yourself. It's time to persevere. Now is not the time to panic or sit on the sidelines. It's the time to get serious and tie down for the storm, and that will drive you to get the edge you need. If salespeople work their hardest and stay focused, they will be able to get the deals and create loyalty among customers.
What's the best advice you're heard from one of your salespeople?
A colleague told me: "I'm going to put blinders on. If I fail, I'm just going to keep going -- I'm not looking at what others are doing." I think salespeople need to learn from a trader's attitude. Even if a trader loses one day, he has to get up and say: "Today I'm going back to work and getting the right deal."
Is the recession a reason to let go of salespeople?
No. I think you need more salespeople, to reinforce the troops. And you need the salespeople to team up. Not everyone is good at the same thing. Maybe someone knows more about retail space, and someone else is better with people. So we put them together to get the deals.
If businesses aren't laying off salespeople, where should they be saving expenses?
Be lean and mean with inventories and supplies. But don't cut advertising.
Any other advice for salespeople?
Never tell a prospective customer no right away. Today a retailer told me she wanted space on Madison Avenue for $1,000 a square foot. It's normally $1,500 a square foot. I didn't laugh and tell her no way. I said, "I'll try."
Do you tell salespeople to follow the old rule of ABC, "Always Be Closing"?
No. Customers don't like pushiness. I tell salespeople to be good listeners. A lot of people talk too much and listen too little.
How does the election affect your real estate business?
We won't know for the next few months. I'm waiting for the market to rally because it got the candidate it wanted. A lot of landlords and customers were worried before the election because they didn't know what was going to happen. Now we have a President, and we can stop worrying about what will happen in the election. And people aren't distracted by the campaign and glued to the TV anymore. They can make business decisions now.
Just curious, here at BusinessWeek's office near Rockefeller Center, we're surrounded by clothing retailers. Will any of them gain from the economic meltdown's fallout?
Yes, H&M (HMB.ST), Zara, and Mango, because they're lower-priced. And Topshop is coming to the U.S. from London, and it will certainly thrive. Everyone is looking for a bargain. People who used to shop at H&M just because it was fun to get a top for $5 will shop there now because it's what they can afford.
6 months ago