Real estate is the key cost of physical retailers. That's why there's the old saw: location, location, location.
Sentiment: NEGATIVE
Real estate deals a lot with the government. It isn't like manufacturing, logistics, home appliances or the auto sector, which deal with consumers.
The problem with real estate is that it's local. You have to understand the local market.
Now it's easy for someone to set up a storefront and reach the entire world in very modest ways. So these technologies that we thought would dis-intermediate traditional sellers gave more people the tools to be sellers. It also changed the balance of power between sellers and buyers.
When I started at Bloomingdale's as a buyer, Alexander's was a discounter across the street, and every time Alexander's had something that we had at Bloomingdale's, we'd have to meet price. I didn't really want to be in a business where I had no control over my inventory, the value of my inventory.
Every retailer, when they price their goods, looks at their total cost overall. When they have costs go up, they'll price their products accordingly.
Even if you have $20,000 to buy an item, you still try to get a good price at antique stores. I collect furniture, rugs, paintings, frames. It's my hobby to go around to shops and markets.
In fashion, we don't often know the prices. We don't have time to go into the stores.
Even in a bad market, location, location, location is a way to still buy and sell property.
We're the real estate industry - not the manufacturers.
If you circle above Central Park at night in a helicopter, you're looking down at the most expensive real estate in the world. It's the American Monopoly board.