Maury Harris, chief economist at UBS Warburg, noted in an economic advisory report on Monday: "In business surveys by the Philadelphia Fed and the Business Council, 40 percent of respondents indicated that ‘geopolitical uncertainties’ or ‘concerns about war/terrorism’ were affecting either ‘hiring and spending plans’ or ‘business plans.’"
Last week, Salomon Smith Barney hosted a conference call on mall security in light of the potential for terrorist attacks. While there is a belief that regional malls might pose as a "soft" target over apartment buildings and trains, there was concern that mall owners are reluctant to put higher security measures in place because they might scare consumers away.
"At this point, we’re taking it one day at a time, obviously, but it’s only reasonable that there will be some natural slowdown, or at least a shift in the spending," said Ed Burstell, vice president and general manager at Henri Bendel. "There will probably be more feel-good impulse buys with items like cosmetics and accessories, but at this point, it’s all wait-and-see."
"Confused" is how owner Nevena Borissova expressed the mood of her clients at West Hollywood, Calif., boutique Curve. "One day we have no sales and the next day we have an incredible day. No one knows how to deal with it."
Observers do not think all products would be hurt to the same degree, during a lengthy engagement, however. Fashion merchandise, for one thing, could do better than many other categories, they theorized, by providing an outlet to express one’s viewpoint on the war — much as it did during the Vietnam War in the Sixties. "Fashion with peace graphics is doing very well right now," noted Marc Gobe, president, ceo and creative director of brand image consultant desgrippes gobe, here. "About 30 percent of Americans are against the war, and I think they will be very motivated to make a statement; to differentiate themselves from the mainstream." Gobe also thinks a long-running conflict would spark the development of certain items and styles to express antiwar sentiment, a role played by jeans in the Sixties.